Preface

For our inaugural interview, we wanted to outline the editorial approach we’ll take at GP Stakes News. Our aim isn’t to rehash headlines or repeat narratives you’ve heard before. We’re here to surface new insights, fresh perspectives, and to better understand how key players in the GP Stakes space think. Our content is designed both for newcomers trying to understand the asset class and for professionals operating in it every day—those who want deeper context to inform decisions.

If you’re looking for background on our guest and broader takes on GP Stakes, you can explore interviews with Michael Rees here, here, here, here or here.

With that, I’m pleased to share my recent conversation with Michael Rees, Co-President of Blue Owl and Head of its GP Strategic Capital platform.

What We Already Know

• Blue Owl’s GPSC platform has made 60+ partnership investments since inception, with a 10+ year track record and $67 billion in AUM

• Invests across three verticals: GP Minority Stakes, GP Debt Financing, and Professional Sports Minority Stakes

Digging Deeper

Revisiting the Thesis: 2015 vs. Now

We kicked things off with Blue Owl GPSC’s original 2015 thesis on GP Stakes. Rees explained that their view at the time was that the GP landscape would evolve similarly to traditional asset management, where the largest players capture the majority of inflows.

That thesis, he admitted, didn’t fully materialize—at least not until mid-2022. For years, most GPs (not just the largest ones) were able to raise capital successfully. But as the fundraising environment normalized, clear winners and laggards began to emerge. That’s when the 2015 thesis started to hold true. In Blue Owl GPSC’s view, the advantage now lies with scale.

Rees also pointed to several tailwinds fueling the GP Stakes market today: expanding access via the wealth channel, increased insurance capital participation, and growth from geographies historically under-allocated to private markets.

Control Deals: Catalyst, Not Competition

“We absolutely love it when a control deal happens,” Rees said. Why? Because it sparks strategic self-reflection across GPs in the industry. Most GPs, he observed, don’t want to sell control. However, when large control transactions do occur (think $500M+ enterprise value), Rees notes that they tend to be rare, deliberate, and targeted. The target GP is “looking for a good home” and the “home [acquirer]” is looking for a specific addition to its platform.

These deals push peer firms to consider capital alternatives that don’t necessarily require giving up control, such as GP Stakes. IPOs, Rees noted, remain elusive and burdensome, given the regulatory overhead of being a public company. A passive minority investment, by contrast, allows GPs to retain control, raise capital, and gain breathing room to plan their long-term strategy.

GP Financing Solutions: Not a Compelling Market

When asked about structured GP financing solutions—namely preferred equity—Rees was blunt and said that his team “does not see anything significant in the forward-looking market for GP Solutions / GP Structured investments.” He has seen a couple of those deals done, but Blue Owl GPSC does not view them as an “interesting [or large] market” and does not expect returns for investors of those products to be good. Specifically, Rees thinks that GPs are not interested in these solutions and that LPs are “capping the upside on their return and taking wrong-way risk.” IRRs for these solutions tend to look good early in a fund’s life, but tail down over time.

Could a New, Diversified Public Alts Manager Emerge?

“Public shareholders would love another high-quality alternative asset management firm…but it’s really hard to individually build a firm that will be tailored for the public shareholder,” Rees remarked from a high-level perspective. That said, while a single asset class focused GP could be tricky to bring to the public markets, there are “great firms that [could] be components to a public company, but do not fit the full spectrum of what’s needed [to be listed individually].” Blue Owl GPSC knows of, and has partnerships with, a lot of GPs that are “great components for a public company” and “at some point” there could be “an interesting solution of putting a few of them together to create what would be a very attractive alternative manager.”

New Investments: Incline Equity Partners, Veritas Capital, and H.I.G. Capital

No Michael Rees interview is complete without a mention of Pittsburgh. Blue Owl’s GPSC platform invested into Incline Equity Partners, a Pittsburgh-based middle market private equity firm, as Incline scaled in size and was at “the right time and trajectory.” The investment was made back in December 2024.

As for Veritas, Rees praised its business model of having a “wide moat, differentiated, and scaled.” This March 2025 investment marks Blue Owl’s GPSC platform’s second bite at Veritas, following its $725M investment for an 11.79% stake in 2020.

The most recent transaction? A fourth investment in H.I.G. Capital. Rees didn’t comment on specifics.

Are LPs Going Direct into GP Stakes?

Some industry watchers have speculated that some LPs are shifting from passive capital allocators to direct GP Stakes investors. Rees doesn’t see this happening “at scale.” Instead, he views LP involvement as a form of “acceleration capital” deployed in markets where they intend to be active allocators—receiving GP economics as part of the arrangement. However, by no means, does Rees see LPs “looking to write $100 million and up checks for GP Stakes [direct stakes in GPs, not allocations to GP Stakes firms].” Rees does note, however, that there are LPs who will co-invest alongside platforms like Blue Owl GPSC, but are not doing deals of scale on their own.

Max’s Conclusion

Catching up with Michael Rees was both insightful and timely. Blue Owl GPSC continues to execute on its strategy—particularly its third pipeline of target investments, which includes follow-ons with existing partners (see page 73 of Blue Owl’s 2025 Investor Day deck).

Its push into the middle market adds a new layer of opportunity, and I’ll be watching closely as that effort scales. The top end of the market remains active—and Blue Owl GPSC is clearly playing offense.

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