Former Morgan Stanley Exec Bradley Raising $1B For GP Interests Fund

Mar 2 2016 | 9:31pm ET

Former Morgan Stanley executive Mark Bradley has dusted off plans to form a fund aimed at buying minority stakes of 25% or less in private-equity firms.

The fund, aptly named GP Interests, is targeting assets of $1 billion, according to an article in The Wall Street Journal citing unidentified sources familiar with the matter. The fund plans to eventually pursue an IPO, according to the article. 

Bradley is the former global head of Morgan Stanley’s financial sponsors group, which works with private-equity firms on deals. He left Morgan Stanley in January 2012 and founded boutique investment banking company Dean Bradley Osborne. 

According to the Journal, Bradley initially pursued raising a fund to buy stakes in PE firms in 2012, and GP Interests was formed that year as part of a smaller effort seeking to raise $300-$500 million. The plans were ultimately shelved. 

Bradley’s idea to eventually list San Francisco-based GP Interests on the stock exchange echoes what several firms, such as Affiliated Managers Group, have done in the hedge fund space; buy stakes in a large group of managers and then offer shares to the public, providing access to smaller investors that would otherwise be off-limits due to size and cost hurdles. 

A diversified portfolio of general partnership interests could be interesting to investors seeking higher revenue streams from fees and profits, noted the Journal, although risks are clearly higher than traditional equity and fixed-income investing. In addition, such a portfolio could provide tremendous insights into the GP’s themselves as well as their portfolio companies. 

For the private equity firms, investors such as Bradley’s fund can provide permanent capital and a way to cash out without the hassle or scrutiny of going public themselves. 

Further details around Bradley’s current effort were not immediately available.

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