Key Takeaways
- • GEM, a Charlotte, North Carolina-based independent investment management firm, completed the final closing of GEM Independent Sponsors Fund II with $685 million in total program commitments, and the fund reached its hard cap.
- • The second fund rose from the $450 million raised by the firm's inaugural independent sponsors fund in 2025, a 52% increase in committed capital.
- • Commitments came from institutional investors including foundations, healthcare institutions, insurance companies, university endowments, and clients of GEM's affiliated outsourced chief investment officer business.
- • GEM has evaluated more than 1,200 opportunities and completed 87 investments alongside more than 30 independent sponsors under its program to date.
- • Harris Williams served as exclusive placement agent and Ropes & Gray provided legal counsel on the fund's formation.
Summary
GEM, an independent investment management firm headquartered in Charlotte, North Carolina, has completed the final closing of GEM Independent Sponsors Fund II, securing $685 million in total program commitments. The fund reached its hard cap and drew a diversified group of institutional investors, including foundations, healthcare institutions, insurance companies, university endowments, and clients of GEM's affiliated outsourced chief investment officer business.
The closing extends the firm's program of partnering with independent sponsors pursuing private equity transactions in the lower middle market. Independent sponsors identify and structure acquisitions without a traditional committed private equity fund, instead raising capital deal by deal from institutional investors and other capital providers. GEM's strategy provides institutional financing to these sponsors while allowing its investors to participate in selected private equity opportunities. The $685 million fund follows the firm's inaugural independent sponsors fund, which raised $450 million in 2025. GEM said the increase reflects the growing role of independent sponsors in institutional private equity portfolios.
According to GEM, the firm has evaluated more than 1,200 investment opportunities and completed 87 investments alongside more than 30 sponsors. Some sponsors it has supported have subsequently established committed private equity funds, which GEM views as an opportunity for continued partnership. The firm emphasizes careful sponsor selection, transaction underwriting, and long-term relationships with teams capable of building sustainable private equity businesses.
The independent sponsor program is led in part by Managing Director Kelly Barofsky, alongside the firm's broader investment leadership team. Jay Ripley, Head of Investments at GEM, said the firm has invested alongside independent sponsors for more than a decade and described its sourcing network and selectivity as central to its approach. Barofsky said the firm is seeing more opportunities than ever and will focus capital on the sponsors it finds most compelling. Harris Williams served as exclusive placement agent for the fundraise, and Ropes & Gray provided legal counsel. Founded in 2007, GEM provides customized investment solutions for long-term investors, combining investment research, portfolio management, and institutional advisory capabilities.
The closing extends the firm's program of partnering with independent sponsors pursuing private equity transactions in the lower middle market. Independent sponsors identify and structure acquisitions without a traditional committed private equity fund, instead raising capital deal by deal from institutional investors and other capital providers. GEM's strategy provides institutional financing to these sponsors while allowing its investors to participate in selected private equity opportunities. The $685 million fund follows the firm's inaugural independent sponsors fund, which raised $450 million in 2025. GEM said the increase reflects the growing role of independent sponsors in institutional private equity portfolios.
According to GEM, the firm has evaluated more than 1,200 investment opportunities and completed 87 investments alongside more than 30 sponsors. Some sponsors it has supported have subsequently established committed private equity funds, which GEM views as an opportunity for continued partnership. The firm emphasizes careful sponsor selection, transaction underwriting, and long-term relationships with teams capable of building sustainable private equity businesses.
The independent sponsor program is led in part by Managing Director Kelly Barofsky, alongside the firm's broader investment leadership team. Jay Ripley, Head of Investments at GEM, said the firm has invested alongside independent sponsors for more than a decade and described its sourcing network and selectivity as central to its approach. Barofsky said the firm is seeing more opportunities than ever and will focus capital on the sponsors it finds most compelling. Harris Williams served as exclusive placement agent for the fundraise, and Ropes & Gray provided legal counsel. Founded in 2007, GEM provides customized investment solutions for long-term investors, combining investment research, portfolio management, and institutional advisory capabilities.
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