In September, Institutional Investor convened more than sixty leading allocators for a timely virtual discussion on the emerging opportunities in GP financing. The webcast, introduced by Katarina Storfer, Managing Director and Head of North America, was led by Institutional Investor’s Senior Advisor, Cynthia Steer, who framed the conversation as an exploration of how established firms can strengthen their profitability and capital structures through innovative financing strategies.
Steer emphasized that GP financing is not a matter of asset size but rather of building resilient business models. With private equity fund durations now stretching well beyond the conventional five to seven years, she argued that financing solutions to support reinvestment and growth have become essential. For her, the concept is simple: know yourself, ensure alignment among stakeholders, and structure solutions that allow managers to thrive in increasingly complex markets.
From the consultant’s vantage point, Ryan Burke of Aksia underscored the attractiveness of GP financing as a diversifying strategy within private credit. He described it as offering debt-like structures, contractual returns, and, most importantly, a meaningful premium over direct lending. For institutional clients already deeply invested in private credit, GP financing represents a way to expand into specialty finance while maintaining discipline around covenants and asset quality. In his view, the liquidity premium and diversification benefits make the strategy an appealing complement to existing credit allocations.
On the asset management side, Gregory Hardiman of Crescent Capital highlighted how GP financing can support managers at critical junctures in their growth. For Crescent—an institution with decades of experience in sponsor-focused private credit—the opportunity lies in leveraging long-standing relationships to provide capital to institutionalized firms that are well governed and entering the mature stages of their lifecycles. Hardiman emphasized that the most common need is for reinvestment: enabling successful firms to increase partner commitments, support new fund launches, and maintain robust alignment with their limited partners.
Institutional investors, however, are approaching the space with both curiosity and caution. Matthew DeAngelo, Deputy CIO at Drexel University, reflected the measured perspective of a university endowment in the early stages of considering GP financing. With limited resources, Drexel is proceeding carefully, focusing on understanding covenants, risks, and protections before allocating. DeAngelo’s framework is one of incremental exposure: adding credit and liquidity risk step by step, rather than rushing into a niche strategy. For him, flexibility and risk awareness are paramount, as is the ability to rely on managers’ expertise to navigate a still-evolving opportunity set.
A similar balance of risk and opportunity was expressed by Amit Thanki of the San Bernardino County Employees' Retirement Association. Representing a $7 billion public pension plan, Thanki explained that every asset must compete on its own merits, and success depends heavily on the breadth of a manager’s relationships and information flow. In his view, GP financing can offer value if approached with realistic expectations and a clear understanding of the potential conflicts inherent in financing general partners.
Taken together, the discussion painted a nuanced picture of a growing market. GP financing is no longer viewed as an obscure corner of private credit; it is increasingly recognized as a tool for enhancing alignment, unlocking growth, and delivering attractive returns. Yet, as the panelists made clear, success requires discipline—knowing the risks, structuring deals thoughtfully, and setting expectations that are grounded in reality.
For the allocators and managers in attendance, the webcast offered not only clarity but also a sense of where the next wave of innovation in private credit may arise. As Steer noted at the outset, the opportunity is less about chasing scale and more about creating stronger, more resilient firms. That, perhaps, is the real promise of GP financing.
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