- Blackstone has agreed to make a minority investment in GTCR through its GP Stakes business which specializes in making investments in alternative asset management firms.

The investment by Blackstone will provide GTCR’s portfolio companies with access to Blackstone’s group purchasing program, which leverages the buying power of Blackstone’s entire investment portfolio that has more than $150 billion in aggregate revenue. GTCR will also be able to access other services that Blackstone provides its portfolio companies including ESG, human resources, and cybersecurity.

- “We are thrilled to have this opportunity to work with Blackstone as a passive minority investor in our firm,” said GTCR managing directors Collin Roche and Dean Mihas in a released statement. “Blackstone is an exceptional institution, and we expect they will bring resources and perspective that will help us as we continue to serve our limited partners, build our franchise and invest our funds over the long term.

Blackstone’s GP Stakes business has been active recently. Last week, New York City-based Sentinel Capital Partners announced that GP Stakes and RidgeLake Partners had made a minority investment in the firm. RidgeLake is a partnership between Ottawa Avenue Private Capital and PA Capital (a majority-owned subsidiary of New York Life), that makes minority investments in mid-market private equity firms.

“In Blackstone and RidgeLake, Sentinel has partnered with two outstanding firms that we believe bring significant strategic value,” said John McCormack, a co-founder and senior partner at Sentinel.

Sentinel invests in management buyouts, recapitalizations, corporate divestitures, and going-private transactions of businesses with EBITDAs up to $80 million. The firm targets eight industry sectors: aerospace and defense, business services, consumer, distribution, food and restaurants, franchising, healthcare, and industrials.

- Since its founding in 1980, Chicago-based GTCR has invested more than $20 billion in over 250 companies. Sectors of interest include business services; technology, media & telecommunications; healthcare, and financial services & technology. In November 2020, GTCR closed its thirteenth fund, GTCR Fund XIII LP, with $7.5 billion of limited partner capital commitments. The new fund, raised in just five months, is the largest investment fund in GTCR’s history.

- “GTCR has developed one of the most respected investment franchises in the private equity industry,” said Mustafa Siddiqui, the head of Blackstone’s GP Stakes business. “The firm has a world-class group of leaders and investment professionals, a differentiated investment approach and a long history of success. I have been personally gratified to develop rapport with the GTCR team, and we look forward to our long-term partnership.”

“Our top priority is to partner with the most successful general partners in private equity,” said Ward Young, a managing director with GP Stakes. “We are especially impressed with GTCR’s strategy of investing in transformative growth behind talented executives. We are pleased to support GTCR’s ongoing success.”

New York City-based Blackstone (NYSE: BX), with more than $684 billion in assets under management, invests in private equity, real estate, public debt and equity, non-investment grade credit, real assets, and secondary funds. The firm also provides financial advisory services, including financial and strategic advisory, restructuring and reorganization advisory, and fund placement services.

Evercore was the financial advisor to GTCR, and Kirkland & Ellis provided legal services.

© 2021 Private Equity Professional | July 29, 2021