How I Invest with David Weisburd

E319: GP Stakes Investing: Liquidity, Alignment, and the Real Risk

17 snips
Mar 6, 2026
Guest
Todd Owens
Todd Owens, Managing Partner at Cantilever Group who backs minority GP-stakes in lower middle-market managers. He explains what buying a GP stake actually means. He focuses on liquidity and unpredictable exits as the core risk. He discusses public listings, lower-middle-market advantages, structuring choices, and red flags when principals take money off the table.
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INSIGHT

Three Primary Uses Of GP Stake Capital

  • Three common GP stake use cases are growth capital, capital restructuring (e.g., buyouts of retiring partners), and liquidity for principals taking money off the table.
  • Cantilever prefers growth equity but will underwrite other uses if justified.
INSIGHT

How Growth Capital Accelerates Managers

  • Growth uses include funding larger GP commitments and seeding adjacent strategies, which can de-risk raises and enable larger flagship funds.
  • Examples: increasing GP commitment from 2% to 5% or seeding mezzanine to senior loan or control strategies.
ADVICE

Buy The Whole Management Company For Alignment

  • Prefer full-business equity stakes for alignment rather than buying a single new-strategy GP; structure single-strategy financing as preferred or debt if necessary.
  • Full alignment with principals is critical for Cantilever's equity investments.
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