- Private-equity firms are increasingly considering selling minority stakes in their management companies to raise cash, with 77% planning a sale in the next two years.
- GP-stake deal volume hit about $3.5 billion through October 2025, nearing the 2015 record and signaling strong investor demand.
- Weak exits, longer holding periods, and LP liquidity pressure are pushing more activity into secondaries and GP-led solutions.
- Stake sales provide capital and succession flexibility but dilute ownership and may reduce future economics and control.
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The Wall Street Journal reports that private equity firms are increasingly considering selling minority GP stakes to generate cash amid industry headwinds: declining exit opportunities, heightened LP demands, and aging portfolios. A Dechert survey finds that 77% of fund managers plan a GP stake sale over the next two years—more than double last year’s 34% figure.
The GP-stakes market through October 2025 reached approximately $3.5 billion in deal volume, poised to exceed the 2015 high of $3.6 billion. This indicates not only growing appetite but also record activity for high-profile GP stake transactions. Notably, firms like Blue Owl Capital, Blackstone, Hunter Point Capital, and Petershill Partners (Goldman Sachs) are major players in this arena.
Underlying forces are reinforcing this trend. First: liquidity pressure. Limited partners (LPs) are demanding returns, but exits via IPOs, sales, or mergers have lagged. As of September 2025, U.S. PE firms held roughly 12,900 portfolio companies—up modestly over year-end 2024—with median holding periods near seven years, well above historic norms.
Second: shrinking dry powder. While undeployed capital remains large, it fell in the U.S. from around $1.3 trillion in December 2024 to about $880 billion by September 2025. This decline reduces financial buffer and intensifies pressure on managers to monetize assets or access alternative liquidity.
Third: secondary market and GP-led structures are becoming standard mechanisms for liquidity. In 2024, secondary market activity rose to $162 billion globally, up 45% year-over-year, with LP-led deals and continuation vehicles (CVs) making up a large share. Continuation vehicles alone are estimated to contribute at least 20% of PE distributions in 2026 as LPs increasingly prefer selling over rolling into new structures.
Strategic implications are mixed. Sellers (GPs) get capital infusion, can fund expansion, or enable partner transitions. However, giving up GP ownership may reduce autonomy, future fee income, and influence. Buyers of GP stakes are exercising selectivity—preferring top-tier firms with strong track records—possibly leaving mid-market GPs without easy access.
Open questions revolve around valuation, pricing, and LP/GP alignment. GP stakes are complex to value, especially over long horizons with uncertain exit prospects. Will GP-stake deals become commoditized or remain niche for elite firms? How will governance evolve post-transaction? And fundamentally, will macro conditions (interest rates, exit environment, regulatory policy) support the liquidity needs that are motivating this shift?
Supporting Notes
- Survey by law firm Dechert: 77% of fund managers plan to sell minority stakes in their firms in the next 24 months; up from 34% last year.
- GP-stake deal volume reached $3.5 billion through October 2025; poised to exceed $3.6 billion record from 2015.
- LP-led secondary market activity hit $162 billion in 2024 globally—up 45% YoY—with over half coming from LP-led deals.
- As of late September 2025, U.S. PE firms held ~12,900 companies in portfolio; median holding periods near seven years versus ~5.2 pre-pandemic.
- Dry powder in U.S. PE dropped from $1.3 trillion in December 2024 to about $880 billion by September 2025.
- Continuation vehicles expected to generate ~20% of distributions in 2026 as LPs favor liquidity over rolling for upside.