Key Takeaways
- • GEM closed Independent Sponsors Fund II, LP at $685 million, reaching its fundraising hard cap, according to the primary source.
- • The final close represents an increase of approximately 52% over GEM's inaugural $450 million independent sponsors fundraise completed in 2025.
- • Commitments came from foundations, healthcare institutions, insurance companies, university endowments and clients of GEM's affiliated outsourced CIO business.
- • Harris Williams served as exclusive placement agent and Ropes & Gray provided legal counsel on the fund's formation.
- • GEM has evaluated more than 1,200 opportunities and completed 87 investments alongside more than 30 sponsors through its independent sponsor program.
Summary
GEM, an independent investment management firm serving institutional investors, has closed its second independent sponsors fund at $685 million, reaching its fundraising hard cap. The final close of GEM Independent Sponsors Fund II, LP drew commitments from foundations, healthcare institutions, insurance companies, university endowments and clients of GEM's affiliated outsourced chief investment officer (OCIO) business. The raise is approximately 52% larger than the firm's inaugural $450 million independent sponsors fundraise completed in 2025.
The fund will continue GEM's strategy of investing alongside independent sponsors, private equity professionals or investment teams that identify and execute acquisitions without relying on a traditional committed fund. Instead, these sponsors typically secure capital for individual transactions from institutional investors and other financing partners. According to the company, this model lets institutions evaluate specific acquisitions and sponsor relationships while gaining exposure to privately held businesses in the lower middle market, though it also requires assessing individual transactions and sponsor capabilities.
GEM has participated in the independent sponsor market for more than a decade. The firm says it has evaluated more than 1,200 investment opportunities and completed 87 investments alongside more than 30 sponsors. Several sponsors backed by GEM have subsequently launched traditional committed private equity funds, which the firm views as a way to identify emerging managers and potentially support their development.
Jay Ripley, Head of Investments at GEM, said the independent sponsor market "has evolved from a niche segment of private equity into an increasingly important source of lower middle market exposure." Kelly Barofsky, Managing Director and co-leader of GEM's independent sponsor program, said the firm is "seeing more opportunities than ever" and intends to maintain a selective approach as competition in the market increases.
The firm did not disclose the number of limited partners in Fund II, capital deployed to date or specific investment targets. Harris Williams served as exclusive placement agent, and Ropes & Gray provided legal counsel. Founded in 2007, GEM provides customized investment management, research, portfolio management and institutional advisory services to long-term investors.
The fund will continue GEM's strategy of investing alongside independent sponsors, private equity professionals or investment teams that identify and execute acquisitions without relying on a traditional committed fund. Instead, these sponsors typically secure capital for individual transactions from institutional investors and other financing partners. According to the company, this model lets institutions evaluate specific acquisitions and sponsor relationships while gaining exposure to privately held businesses in the lower middle market, though it also requires assessing individual transactions and sponsor capabilities.
GEM has participated in the independent sponsor market for more than a decade. The firm says it has evaluated more than 1,200 investment opportunities and completed 87 investments alongside more than 30 sponsors. Several sponsors backed by GEM have subsequently launched traditional committed private equity funds, which the firm views as a way to identify emerging managers and potentially support their development.
Jay Ripley, Head of Investments at GEM, said the independent sponsor market "has evolved from a niche segment of private equity into an increasingly important source of lower middle market exposure." Kelly Barofsky, Managing Director and co-leader of GEM's independent sponsor program, said the firm is "seeing more opportunities than ever" and intends to maintain a selective approach as competition in the market increases.
The firm did not disclose the number of limited partners in Fund II, capital deployed to date or specific investment targets. Harris Williams served as exclusive placement agent, and Ropes & Gray provided legal counsel. Founded in 2007, GEM provides customized investment management, research, portfolio management and institutional advisory services to long-term investors.
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