Recent years have seen a marked rise in GP M&A activity across Europe with deal activity reaching record levels across both European and global markets. According to a February 2026 Campbell Lutyens report, the market recorded 164 deals in 2025, representing an increase of almost 40% compared to 2024, with approximately 70% of transactions completed on a cross-border basis. With no signs of this momentum slowing, understanding the key drivers, structures and considerations behind these deals has never been more important for GPs navigating their own strategic options.

The GPs we speak to consistently raise three key reasons for exploring a sale of part or all of the house: (a) desire to raise balance sheet capital, (b) to support fundraising, and (c) succession planning – releasing capital to founders and/or facilitating equity incentivisation of the second and third tier team members.

Raising balance sheet capital helps GPs to fund their expansion into new geographies, fund their GP commitment and/or give them the firepower to hire a team, or buy a further platform, and launch new strategies. Limited partners have always expected GPs to have a meaningful commitment in any fund they raise, but as funds grow in scale amid increasing consolidation in the asset management industry, funding that commitment can be increasingly challenging. This is compounded by inclement fundraising environments which have put increased demand on that commitment, together with a choppy exit market which has resulted in delayed carried interest distributions.  

Fundraising support is another critical consideration. As GPs seek to raise larger funds or new strategies, a strategic partner can bring a hallmark of sophistication and/or recognition in a particular jurisdiction or sector to help promote fundraising, support distribution in new geographies or provide capital for future funds.

Succession planning is also often a key driver. The maturity of the industry now means founders are reaching the age where they are looking to hand over to the next generation whilst also seeking to realise a capital return on the highly successful platforms they have built. External investment can allow a GP to buy out and release capital to departing founders and retiring partners and / or recruit and incentivise junior tiers of management as they step into leadership roles.

More often than not multiple of these objectives are at play, and the drivers behind the transaction will ultimately determine the type of capital, the price of that capital and the level of control that will need to be ceded as part of the deal. 

We similarly see buyers fall into three categories: GP stakes funds, balance sheet buyers and limited partners who are typically cornerstone investors in the GP's fund.

Dedicated GP stakes funds focus on GPs as an asset class to invest in and are often seeking yield from the management fee, carried interest or other performance-based revenue streams (and on occasion also capital return thereon). As such, they tend to favour minority investments in multiple managers that demonstrate long-term sustainability and best-in-class track records, rather than pursuing a single large-scale acquisition. They also offer strategic partnership – providing tactical support across the portfolio – private equity for private equity.

Balance sheet buyers, on the other hand, are typically pursuing inorganic growth to accelerate their expansion into new geographies, grow their assets under management and / or diversify their fund strategies. Since building a new strategy or establishing regional presence organically is time-consuming, these buyers favour the acquisition of assets with outstanding track records that immediately enhance their platform. Balance sheet buyers are often either: (a) multi-strategy alternatives managers who have themselves sought external funding either through the public markets or via one of the many routes considered here; or (b) traditional asset managers looking for a captive private fund manager.

Finally, the original stake investor, LPs, are taking stakes and enjoying a de facto management fee discount by gaining exposure to yield from the house and/or carried interest. Beyond preferential economics, limited partners may also seek some strategic oversight, greater alignment with management and increased transparency on portfolio performance, potentially with a view for more direct co-investment opportunities alongside the GP's funds – always without breaking the discretionary management status of the GP. Whilst historically the most common form of stake sale, often undertaken alongside the earlier fundraises of now well-established GPs, they were also treated as highly secretive. Now coming out from behind the curtain are increasing numbers of large LPs who are open about which of their GPs they have taken an equity position in and their appetite for taking more – sometimes a pre-requisite for investing in early vintage managers.

When a GP comes to market, the unique combination of their motivations for exploring a sale and the level of control they are prepared to relinquish will help determine who the right partner is for them.

GP stakes funds and LPs tend to favour minority investments, while multi-strategy funds generally prefer deals that build towards majority ownership and greater control, even if this is achieved over time through call options over residual minority positions. GP stakes funds bring a hallmark of sophistication, but are less likely to offer a commitment into future funds or distribution support – albeit some do offer considerable strategic support and potential LP introductions. Conversely, LPs may offer a commitment into future funds but will also often seek greater strategic oversight than a GP stake fund.

These deals also carry a significant personal dimension - founders are selling substantial stakes in businesses they have established and grown over many years, the emotional side of which should not be underestimated. Founders must carefully consider the nature of their economic return, the impact on the wider team, and how much control they are prepared to give up - both immediately and over the longer term. Where there are multiple founders, it is also important to collectively agree a strategy upfront and tackle any political dynamics head-on, to ensure full alignment in delivering a successful transaction.

The success of a GP stake transaction depends on tailoring terms to the unique priorities of both GP and investor; one size does not fit all. For GPs, the choice of investor is driven not just by the terms of the capital available but also by relationship fit, strategic benefits and existing personal connections.

How far a GP is along its journey and the level of focus on corporate hygiene to date will determine the level of work needed to prepare for a sale.

Key early-stage questions for GPs contemplating a sale include:

Preparing for a sale is often time-consuming and achieving tax neutrality can be challenging. Addressing these topics early builds trust with buyers and can help facilitate smoother execution and, ultimately, a quicker deal.

Determining which consents are required under fund documents is a critical early step, but regardless of formal requirements, GPs are ultimately dependent on raising capital from their investors and so should ensure thoughtful engagement with LPs throughout the process. The timing of discussions with LPs is an important investor relations consideration, with formal consent - if necessary - typically sought after exchange. While LPs rarely vote against a deal, they are likely to raise questions around the stability of the GP and ongoing alignment of interests, so effective communication remains key.

In addition to LP / LP Advisory Committee consent, most GPs will require financial regulatory consent and, where they have NAV or subscription line facilities, lender consent. Depending on the GP's business and the underlying portfolio, anti-trust, foreign direct investment and/or change of control consents may also be needed. These consents are usually obtained between exchange and completion, although some GPs initiate preliminary discussions with regulators in the hopes of increasing deal certainty and potentially expediting what can be a lengthy process. Consideration also needs to be given to whether any consents will be required at the portfolio level.

Given the nature of these businesses, transactions are invariably conditional. Careful mapping of third-party consents from the outset will help prevent unnecessary delays and promote deal certainty.

A core focus of GP M&A negotiations is determining the right balance between control and involvement: how much control is the GP willing to relinquish, and what sort of influence does the buyer expect to have in the day-to-day running of the business? Is business plan control sufficient or are more specific negative controls required?

Setting realistic expectations is key. GPs should anticipate restrictive covenants for key team members, limits on the use of track record and, in most cases, giving up at least one board seat (or at minimum, granting an observer seat) and approval rights over the business plan. The level of oversight an investor expects to have over communications with LPs / LP Advisory Committees is another oft-discussed issue: whilst some will be content to be kept informed via the GP, others may expect a more direct level of involvement.

Funding arrangements are another frequent negotiation point: what is the plan for new capital, who will have the right to participate in new issues, and who makes that decision? Emergency funding is also a consideration – a majority or significant minority investor will want the right to inject capital to protect their investment, while a minority investor will be concerned about how urgent funding needs are addressed.

Negotiations also frequently focus on people-related matters, including control of remuneration, carry allocations and treatment of leavers. Carry allocations are often discussed across different strategies – for example, the flagship fund may allocate a certain carry percentage, but new strategies might require a higher allocation to attract and incentivise talent. Thoughtful structuring of equity and carry packages, and potential waivers of restrictive covenants, will also need to be considered in the context of leavers to help prevent disputes and ensure ongoing alignment of interests between management and investors.

Finally, exit strategy requires careful consideration. The stake sold and the long-term position will influence negotiations on drag along, tag along, put and call options and lock-up periods – all of which are important features of the final equity package. Thoughtful structuring of these terms is essential to align incentives, manage exit routes, and protect the long-term interests of all parties.

As a result of inclement fundraising markets, a generation of fund managers reaching the natural age to start stepping back, and slow M&A markets delaying carried interest payments for the next generation of management, GP stakes have become, and will continue to be, increasingly common across European managers. As the volume of deals and demand for capital increases, we also expect equity, and increasingly debt, products available to GPs to become increasingly sophisticated, driving further activity in the market.