🎥 Stable's Erik Serrano Berntsen - what it takes to build a great alternative asset management firm

Welcome back to the Alt Goes Mainstream podcast.Today’s episode dives into what it takes to start, build, and scale an alternative asset manager.We sat down in Stable Asset Management’s London office with Erik Serrano Berntsen.Erik is the CEO of Stable, where he defines and executes the firm’s investment strategy. Stable is one of the largest and most tenured GP stake builders globally. The firm manages around $5B in assets and has built over 40 firms since 2006.Stable makes strategic seed and acceleration investments to launch and scale alternatives GPs across public and private markets. With offices in New York, London, and Palm Beach, the firm backs investment firm Founders who understand that extraordinary performance requires building exceptional organizations.Committed to education as a catalyst for change, Erik supports the LSE Alternative Investments Conference — the world’s largest student conference for alternatives, which is how we met 16 years ago — as well as Girls Who Invest and Girls Are Investors. Stable backs 100 Women in Finance and is a Founding Partner of the 10,000 Interns Foundation.Erik holds a BA in Politics, Philosophy, and Economics from Keble College, Oxford, and an MBA with honors and a concentration in Finance from the University of Chicago Booth School of Business.Erik and I had a fascinating conversation about what it takes to be a great investor and build a unique investment firm. We discussed:* How the business of asset management has evolved since 2006.* What is the “operating system” of an asset management business?* The incentives gap between LPs and GPs — and how that evolves as GPs scale.* How GP seeding and GP stakes can be a solution to LP / GP misalignment.* How to discern a manager’s “edge” and how “edge” can change with firm growth.* The most non-obvious trait that makes for a great asset management founder.* The nuances of evergreen structures and which strategies might be better suited for evergreen structures.* The merits of the GP stakes investment strategy for LPs.Thanks Erik for sharing your wisdom, expertise, and passion about GP stakes and asset management.Thanks for reading Alt Goes Mainstream! Subscribe for free to receive new posts and support my work - writing and podcasting about the convergence of private markets and private wealth since December 2020.A word from AGM podcast sponsor, Ultimus Fund SolutionsThis episode of Alt Goes Mainstream is brought to you by Ultimus, the full-service fund administrator and transfer agent powering asset managers in private and public markets. As alts go mainstream, you need real expertise to handle complex fund structures, connect with key distribution partners, and handle sophisticated compliance, reporting, and transparency demands.That’s Ultimus: high-tech, high-touch solutions for over 450 clients and 2,500 funds with $775B in assets under administration. Backed by an expert team of over 1,200 employees, they place client service at the core of their business, helping you navigate complexity during your fund structuring or launch and then supporting you through every stage of growth. Whether you’re already in the market or thinking about entering private wealth, you can trust their team’s deep expertise in retail alternatives to help you reach your goals.Learn more: ultimusfundsolutions.com or email [email protected] thank Ultimus for their support of alts going mainstream.Show Notes00:00 Likeability Wins00:55 Welcome to the Alt Goes Mainstream Podcast01:50 Introduction to Erik Serrano Berntsen and Stable04:08 Why they named the firm Stable05:38 Branding as Alts Evolve06:47 From Benchmarks to Solutions08:22 What Stable Does08:57 LP / GP Misalignment09:35 GP Stakes Solution10:09 Non-Market Risks11:45 How Edge Changes with Scale14:25 Three Edges to Underwrite16:43 Founders Think Long Term16:55 Project Legends20:28 Timing Cycles and Strategy Drift24:14 Seed vs Acceleration Playbook26:24 Evergreen Capital Goes Mainstream32:25 Wealth Channel Core vs Niche35:25 Strategy and Scale Matrix35:52 Private Equity Liquidity Challenge34:46 Evergreens by Strategy37:06 GP Stakes Lifecycle40:34 Specialist Credit Edge41:52 “Podshopification” in Private Markets44:02 Founder Supply Drivers46:34 Self Awareness Edge48:22 Always Be Sourcing50:16 Founder Led Alignment50:37 Founder to Founder Trust55:28 Operating System Playbook59:46 Valuing Asset Managers01:04:08 Stigma Is Fading01:07:48 What Is Manager Edge01:11:14 Firms to Emulate01:14:24 Final Wrap UpEditing and post-production work for this episode was provided by The Podcast Consultant. Join over 15,200 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