Why GP-Stake Sales Are Rising as Private-Equity Fundraising Falters

Private‐equity firms are increasingly looking to GP-stake sales—where minority investors purchase a share of a GP’s management company—for liquidity amid tightening financial conditions. The drivers are clear: fundraising has dropped sharply, exit activity has slowed, and LPs are demanding greater capital distributions. A recent survey by Dechert shows that 77 % of fund managers plan such a sale in the next 24 months, more than double the prior year’s share. GP-stake deal volume through October 2025 was US$3.5 billion, nearing the earlier high water mark of 2015 (US$3.6 billion), illustrating renewed interest in this financing structure.

Underlying this trend are declining fundraising totals globally—US$680 billion raised in 2024, the third consecutive annual drop, with fundraising totals in 2025 continuing on that trajectory. For many PE firms—especially mid-tier or emerging managers—the confluence of higher interest rates, inflation, and poor exit environments has impaired their ability to satisfy LPs’ liquidity expectations. Secondaries have therefore become an increasingly important liquidity pathway: in 2024, nearly US$162 billion of fund stakes were sold in secondary markets, a 45 % increase year over year.

However, while GP-stake sales can provide immediate cash, they come with trade-offs. Selling minority stakes dilutes long-term fee revenue and decision-making autonomy. Buyers prefer high quality, top performing GPs. Many mid-tier firms may struggle to secure favourable terms or interest at all. Moreover, while LPs are under pressure to invest, their capacity is strained by limited distributions, pushing some to wait until fund vintages mature or markets improve before making new commitments.

Strategically, this environment suggests several implications: (i) for firms with strong track records and scale, this is a rare opportunity to monetize GP ownership; (ii) for smaller or mid-market firms the risk of unfavorable terms or even failure to sell increases; (iii) LPs may shift to favor managers that can demonstrate both high performance and cash yield; (iv) the structure of PE ownership and incentive models may evolve if GP-stake sales become more common; and (v) we might expect consolidation among managers as capital concentrates and weaker firms feel pressure.

Open questions include: how buyers will price GP-stakes given uncertain future exit values; whether regulatory, tax, or LP governance constraints will limit stake sales; how persisting macroeconomic challenges like rate and inflation cycles might further delay exits; and whether LP preferences will permanently shift toward cash yield and shorter hold periods.