🎥 Goldman Sachs Petershill's Robert Hamilton Kelly - riding the waves of change in GP stakes

Welcome back to the Alt Goes Mainstream podcast. Today’s conversation dives into the current state of private markets through the lens of one of the leading GP stakes firms in the industry. We sat down with Partner and Global Co-Head of the Petershill Group at Goldman Sachs Robert Hamilton Kelly. Petershill takes minority equity stakes in established and newly-established alternative asset managers. Across its different investment vehicles, Petershill participates in the fee income from over 200 underlying funds from alternative asset management firms that are diversified across asset class, investment strategy, and investment lifecycle. Petershill’s Partner firms have well in excess of $340B in aggregate AUM and they’ve partnered with a number of the top firms and some of the industry's most recognizable names in the middle market and upper end of the market, including Clearlake, Francisco Partners, Permira, Accel-KKR, General Catalyst, Kayne Anderson Real Estate, Kennedy Lewis, and more. Rob and I had a fascinating conversation on GP stakes and the evolution of alternative asset management. We discussed: * The what, why, and how of GP stakes. * The benefits and drawbacks of GP stakes investing for GPs and LPs. * What makes a great GP. * The question of liquidity in GP stakes. * Why Petershill has generally focused on middle-market alternative asset managers. * How private markets will continue to evolve and the growing importance of the wealth channel in the evolution of asset management. Thanks Rob for coming on the show to share your wisdom and expertise in private markets and GP stakes. We hope you enjoy. Thanks for reading Alt Goes Mainstream! Subscribe for free to receive new posts and support my work. Clip #1: Why is today’s environment “like having sand in the gears?” Clip #2: Why would an LP invest in GP stakes? Clip #3: What is the next evolution in GP stakes? A word from AGM podcast sponsor, Ultimus Fund Solutions This episode of Alt Goes Mainstream is brought to you by Ultimus Fund Solutions, a leading full-service fund administrator for asset managers in private and public markets. As private markets continue to move into the mainstream, the industry requires infrastructure solutions that help funds and investors keep pace. In an increasingly sophisticated financial marketplace, investment managers must navigate a growing array of challenges: elaborate fund structures, specialized strategies, evolving compliance requirements, a growing need for sophisticated reporting, and intensifying demands for transparency. To assist with these challenging opportunities, more and more fund sponsors and asset managers are turning to Ultimus, a leading service provider that blends high tech and high touch in unique and customized fund administration and middle office solutions for a diverse and growing universe of over 450 clients and 1,800 funds, representing $500 billion assets under administration, all handled by a team of over 1,000 professionals. Ultimus offers a wide range of capabilities across registered funds, private funds and public plans, as well as outsourced middle office services. Delivering operational excellence, Ultimus helps firms manage the ever-changing regulatory environment while meeting the needs of their institutional and retail investors. Ultimus provides comprehensive operational support and fund governance services to help managers successfully launch retail alternative products. Visit www.ultimusfundsolutions.com to learn more about Ultimus’ technology enhanced services and solutions or contact Ultimus Executive Vice President of Business Development Gary Harris on email at [email protected]. We thank Ultimus for their support of alts going mainstream. Show Notes 01:54 Welcome Back to the Podcast 02:06 Introducing Robert Hamilton Kelly 03:35 Rob's Boat Racing Experience 04:58 Lessons from Boat Racing Applied to Private Markets 05:19 Current State of Private Markets 05:41 Impact of Policy Changes on Private Markets 06:24 Private Markets Focus on Service-Oriented Sectors 07:23 Growth of Private Markets 07:46 Early Days of Petershill 10:30 Goldman's Role in Alternative Asset Management 13:43 Insights on Valuing GP Stakes 14:53 Data-Driven Investment Strategies 16:56 Management Fees and Performance Fees 25:31 Strategic Imperatives for Growth 31:35 Managerial Skills in Private Markets 34:01 Early Stage Investing and Commercial Focus 34:48 Challenges and Opportunities in Capital Raising 35:49 Industry Consolidation and Firm Growth 36:11 The Future of Small and Mid-Market Firms 38:35 The Role of GP Stakes in Wealth Channel Access 40:52 Goldman's Unique Platform and Its Benefits 42:56 The Importance of Capital and Strategic Advice 44:58 Common Challenges Faced by GPs 46:18 Why LPs Invest in GP Stakes 47:45 Income Generation and Capital Growth 48:44 Diversification and Allocation Strategies 50:39 GP Needs and Market Data 51:06 Long-Term Perspectives for LPs 52:19 Portfolio Construction and Market Trends 54:38 Strategic Growth Areas in Private Markets 56:19 Data and Transparency in GP Stakes 58:58 Private Markets Growth Projections 59:25 Valuation and Return Expectations 01:03:12 Liquidity in the GP Stakes Market 01:05:12 Structural Changes in Private Markets 01:05:57 Venture and Growth Sector Evolution 01:06:46 Private Credit Products and Innovation 01:07:21 Maturation of Private Markets 01:07:44 Conclusion and Final Thoughts Editing and post-production work for this episode was provided by The Podcast Consultant. Join over 11,800 Substack subscribers & followers who are thought leaders and executives from top private markets firms and wealth management like Blackstone, Apollo, Ares, KKR, EQT, Carlyle, Blue Owl, CVC, TPG, Brookfield Oaktree, Vista, Goldman Sachs, J.P. Morgan, BlackRock, Fidelity, iCapital, Franklin Templeton, Nuveen, Hg, Permira, Stonepeak, Hightower, Focus Financial, Cerity Partners, and more. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit altgoesmainstream.substack.com