Taking Money Off the Table: Red Flags

Why would an LP invest in the GP instead of the fund… and what problem is GP stakes really solving? In this episode, I sit down with Todd Owens, Managing Partner of Cantilever Group, to unpack the world of GP stakes. Todd explains what investors are actually buying when they take a minority stake in an alternative asset manager, why liquidity risk is the central challenge, and how structural innovation could reshape the asset class.

Highlights:

• What you are really underwriting when you invest in a GP instead of a fund
• The hidden liquidity risk most LPs underestimate in GP stakes
• Why unpredictable exits are the defining challenge of minority GP investing
• How public listings could reshape liquidity for GP stakes funds
• Why lower middle market GP deals may offer structural advantages
• The three primary reasons GPs sell minority stakes and which one Todd likes most
• When growth capital meaningfully accelerates a manager’s trajectory
• Red flags when principals are taking money off the table
• How to distinguish between a durable firm and a single-founder platform
• Why venture capital can be “too volatile” for GP stakes investors
• The pricing discipline required to walk away from good businesses
• How strategic value creation works when you are a passive minority partner

Guest Bio:

Todd Owens is the Managing Partner of Cantilever Group, an investment firm that focuses on minority GP stakes in lower middle market alternative asset managers. The firm targets investments between $15 million and $75 million, partnering with managers seeking growth capital, capital restructuring, or solutions for generational transitions. Todd previously spent decades advising and working with asset management businesses, including serving as a Partner at Goldman Sachs, and at Cantilever Group he focuses on building a permanent capital model that aligns with GPs while addressing liquidity considerations for LPs.

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Sponsor:

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LinkedIn: https://www.linkedin.com/in/todd-owens-401976160/

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Disclaimer:

This podcast is for informational purposes only and does not constitute investment, financial, legal, or tax advice. Nothing in this episode should be interpreted as an offer to buy or sell any securities or to participate in any investment strategy. All opinions expressed by the host and guests are their own and do not represent the views of Weisburd Capital. Participants may hold positions or have financial interests in the companies, funds, or investments discussed. Any references to specific investments are for illustrative purposes only. Investing involves risk, including the potential loss of capital. Past performance is not indicative of future results, and any forward-looking statements are subject to risks and uncertainties. Any third-party data or opinions have not been independently verified. Listeners should conduct their own research and consult their own advisors before making any investment decision.

(0:00) Why GP Stakes Became a New Asset Class (0:36) What Investors Actually Buy in a GP Stake (1:22) Fund Returns vs. Owning the Management Company (2:09) The Biggest Risk: Unpredictable Liquidity (3:18) How GP Stakes Investors Create Liquidity (5:44) The Permanent Capital Model for GP Stakes (10:30) The 3 Reasons GPs Sell Stakes in Their Firm (11:56) How GP Stakes Capital Fuels Firm Growth (19:07) When GPs Take Money Off the Table (31:03) The Strategic Advantage of Investing at the GP Level