GI Partners Is Said to Consider Selling a Minority Stake

(Bloomberg) -- Another alternative asset manager is looking to take some chips off the table.

GI Partners, a San Francisco-based private equity and real estate firm, is considering selling a minority stake, according to people familiar with the matter.

The firm is working with Evercore Partners Inc. to weigh options including a sale of a piece of its holding company to an outside investor, said the people, who asked not to be identified because they weren’t authorized to speak publicly. No decision has been made, and GI Partners could opt to remain entirely independent, they said.

A representative for GI didn’t immediately respond to requests for comment. A representative for Evercore declined to comment.

GI is considering shopping a stake amid a bump in activity. This month, Santa Monica, California-based Clearlake Capital Group sold a minority stake to Neuberger Berman Group-backed Dyal Capital Partners and Goldman Sachs Group Inc.’s Petershill unit. The duo have raised multibillion-dollar funds to acquire stakes in private equity firms and hedge funds. Other players in the market to buy include Blackstone Group LP and Magnetar Capital.

Aging founders are increasingly willing to explore parting with a stake to raise cash for future funds, new strategies and, sometimes, to buy out a partner who wants to leave, said Tom Bratkovich, founder and managing director of Longview Investment Partners, which advises on such deals.

There were 10 to 15 deals for stakes in alternative asset managers in 2017, most of them worth $100 million to $500 million, Bratkovich said in an interview. That was an increase from previous years and he knows of 10 transactions this year that are pending or completed.

“I’d expect the market to grow further in 2018, in terms of both number of transactions and capital deployed,” he said. “Typically these deals aren’t a single use of proceeds. One common use is for growth equity to start new products.”

GI was founded in 2001 by Executive Managing Director Rick Magnuson. The company’s private-equity team looks to invest as much as $500 million in industries including health care, software and information technology, according to its website. In real estate, GI’s areas of focus include logistics-based warehouse and distribution facilities and technology-advantaged properties such as data centers.

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