0 ⎯ 1
Week of September 8th, 2025
From foreign central banks owning more gold than US treasuries to private equity M&A activity rebounding with optimism after a multi year slowdown and a strategic partnership between Sagard-Baird to expand distribution of alternative strategies to US wealth clients. The full weekly briefing below.
Compendium
Global Markets
David Novosardian
Services
Visual Design
Branding
Website
Problem
GP
Stakes
investing
exploits
a
fundamental
market
inefficiency
that
underlies
through
its
persistent
valuation
discount
between
private
and
public
asset
management
companies
with
public
asset
managers
trading
at
15-25x
earnings
multiples
and
private
fund
managers
in
GP
stakes
transactions
consistently
priced
at
8-12x
earnings,
representing
a
40-60%
valuation
gap
that
reflects
liquidity
premiums
rather
than
fundamental
business
quality
differences.
The
structural
opportunity
emerges
from
three
converging
market
forces:
1)
accelerating
institutional
allocation
to
alternatives
(23%
currently,
targeting
30%
by
2028)
2)
regularity
driven
banking
retreat
creating
$450B
+
annual
private
credit
opportunities
and
further
supply
constraints
in
the
GP
stakes
market
with
only
~40
institutional
quality
participants
globally.
To
translate
this
into
earnings,
we
use
a
regime
switching
revenue
framework
that
couples
a
stable
fee
paying
AUM
engine
(FRE)
with
a
performance
overlay
(PRE)
that
shifts
between
realization
off
and
realization
on.
Under
a
base
layout,
this
translates
into
mid-$90s
to
low-$100s
million
of
Partner
Distributable
Earnings
per
quarter
over
the
next
year,
with
downside
buffered
by
FRE
and
upside
convexity
when
the
realization
layout
restructures.
Solution
GP
Stakes
investing
exploits
a
fundamental
market
inefficiency
that
underlies
through
its
persistent
valuation
discount
between
private
and
public
asset
management
companies
with
public
asset
managers
trading
at
15-25x
earnings
multiples
and
private
fund
managers
in
GP
stakes
transactions
consistently
priced
at
8-12x
earnings,
representing
a
40-60%
valuation
gap
that
reflects
liquidity
premiums
rather
than
fundamental
business
quality
differences.
The
structural
opportunity
emerges
from
three
converging
market
forces:
1)
accelerating
institutional
allocation
to
alternatives
(23%
currently,
targeting
30%
by
2028)
2)
regularity
driven
banking
retreat
creating
$450B
+
annual
private
credit
opportunities
and
further
supply
constraints
in
the
GP
stakes
market
with
only
~40
institutional
quality
participants
globally.
To
translate
this
into
earnings,
we
use
a
regime
switching
revenue
framework
that
couples
a
stable
fee
paying
AUM
engine
(FRE)
with
a
performance
overlay
(PRE)
that
shifts
between
realization
off
and
realization
on.
Under
a
base
layout,
this
translates
into
mid-$90s
to
low-$100s
million
of
Partner
Distributable
Earnings
per
quarter
over
the
next
year,
with
downside
buffered
by
FRE
and
upside
convexity
when
the
realization
layout
restructures.
Solution
GP
Stakes
investing
exploits
a
fundamental
market
inefficiency
that
underlies
through
its
persistent
valuation
discount
between
private
and
public
asset
management
companies
with
public
asset
managers
trading
at
15-25x
earnings
multiples
and
private
fund
managers
in
GP
stakes
transactions
consistently
priced
at
8-12x
earnings,
representing
a
40-60%
valuation
gap
that
reflects
liquidity
premiums
rather
than
fundamental
business
quality
differences.
The
structural
opportunity
emerges
from
three
converging
market
forces:
1)
accelerating
institutional
allocation
to
alternatives
(23%
currently,
targeting
30%
by
2028)
2)
regularity
driven
banking
retreat
creating
$450B
+
annual
private
credit
opportunities
and
further
supply
constraints
in
the
GP
stakes
market
with
only
~40
institutional
quality
participants
globally.
To
translate
this
into
earnings,
we
use
a
regime
switching
revenue
framework
that
couples
a
stable
fee
paying
AUM
engine
(FRE)
with
a
performance
overlay
(PRE)
that
shifts
between
realization
off
and
realization
on.
Under
a
base
layout,
this
translates
into
mid-$90s
to
low-$100s
million
of
Partner
Distributable
Earnings
per
quarter
over
the
next
year,
with
downside
buffered
by
FRE
and
upside
convexity
when
the
realization
layout
restructures.
Solution
GP
Stakes
investing
exploits
a
fundamental
market
inefficiency
that
underlies
through
its
persistent
valuation
discount
between
private
and
public
asset
management
companies
with
public
asset
managers
trading
at
15-25x
earnings
multiples
and
private
fund
managers
in
GP
stakes
transactions
consistently
priced
at
8-12x
earnings,
representing
a
40-60%
valuation
gap
that
reflects
liquidity
premiums
rather
than
fundamental
business
quality
differences.
The
structural
opportunity
emerges
from
three
converging
market
forces:
1)
accelerating
institutional
allocation
to
alternatives
(23%
currently,
targeting
30%
by
2028)
2)
regularity
driven
banking
retreat
creating
$450B
+
annual
private
credit
opportunities
and
further
supply
constraints
in
the
GP
stakes
market
with
only
~40
institutional
quality
participants
globally.
To
translate
this
into
earnings,
we
use
a
regime
switching
revenue
framework
that
couples
a
stable
fee
paying
AUM
engine
(FRE)
with
a
performance
overlay
(PRE)
that
shifts
between
realization
off
and
realization
on.
Under
a
base
layout,
this
translates
into
mid-$90s
to
low-$100s
million
of
Partner
Distributable
Earnings
per
quarter
over
the
next
year,
with
downside
buffered
by
FRE
and
upside
convexity
when
the
realization
layout
restructures.
Partnering with this team completely redefined our brand. The results were beyond what we thought possible.
Jamie Ortega
PM, Treq
