Be like Mitt!
A first-of-its-kind company wants to give average Joe investors entrée into the rarified world of private equity.
Newly formed GP Interests is seeking to raise between $300 million and $500 million to buy stakes in private-equity firms that are usually off-limits to small investors.
The goal is to eventually take GPI public, giving retail investors a chance to get in on the action. Just a handful of such firms, including Blackstone, Carlyle and KKR, are publicly traded and open to mom-and-pop investors.
Mark Bradley, a former Morgan Stanley managing director who advised KKR on its IPO two years ago, said GPI will look to buy 10 to 30 percent ownership positions in a slew of PE firms that want money — but not the hassle or scrutiny of going public.
“We will invest our money with firms that do not want to go public but want committed capital,” Bradley said, adding those could include firms such as Bain Capital, Mitt Romney’s former stomping ground.
Bradley said there are hundreds of firms managing more than $2 billion each in funds, and many owners of these firms are willing to sell stakes so they can cash out or raise money to build new lines of businesses.
While his is believed to be the first firm to be buying stakes in private equity firms, a publicly listed company, Affiliated Managers Group, has done something similar, except with hedge firms.
Bradley points out that while shares of the handful of listed PE firms have sagged, Affiliated Managers shares over the last 12 months have risen better than 40 percent.
“The goal is to create a diversified portfolio of general partnership interests,” Bradley said.