Selling a minority stake in the firm to a long-time fund limited partner allows both the private equity firm and the limited partner to develop a deeper institutional tie. Becoming a minority investor at the firm level could also open up additional investment opportunities at the fund level.
Historically, minority investors in private equity firms have been current or former fund limited partners. Finding Business Partners.
The first two reasons for seeking outside capital could apply to companies in any industry — but the idea of seeking out capital in order to deepen ties with fund investors is unique to the fund business. This Nixon Peabody blog addresses the growing trend of middle market private equity firms seeking outside investors in the sseking themselves — as opposed to their fund vehicles.
Limited partners are attracted to minority investments in private equity firms because their investment maintains a steady stream of income from profits and distributions and avoids the fees associated with investments at the fund level. Osaka has large-scale conference and exhibition halls and each year an average of international conferences and trade fairs are held. Private equity firms look for minority investors with industry expertise, deal sourcing networks and value beyond sewking capital.