Welcome back to the Alt Goes Mainstream podcast.
We sat down with Anthony Maniscalco, the Managing Partner and Business Head of Investcorp Strategic Capital Group (ISCG).
We were live from Berlin, which becomes the “capital of private capital” in June as private equity industry leaders make the annual pilgrimage to the city for one of the marquee private equity conferences, SuperReturn Berlin.
With Prosek Partners and former Bloomberg TV journalist Deirdre Bolton as my producer, along with her team, we took over a Tiny Space cabin to hold big conversations with some of the industry’s leading alternative asset managers.
Investcorp has been a pioneer in private equity. Since its founding in 1982, the firm has grown from a “boutique Gulf firm” into a global and diversified alternative asset manager.
Investcorp launched its Strategic Capital Group (SCG) (GP stakes) business long after its founding in 1982. But the firm brought in a pioneer to launch and build SCG into a leading GP stakes firm, which now has over $2.2B of AUM.
Anthony has been involved in GP stakes from the industry’s early days. He was a founding member of Blackstone Strategic Capital Holdings, a $3.3B private, permanent capital vehicle focused on acquiring minority interests in alternative asset manager GPs. He was also a Managing Director of the Hedge Fund Solutions business at The Blackstone Group. Prior to joining Investcorp, Anthony was a Managing Director and Co-Head of Credit Suisse Anteil Capital Partners.
Launched in 2019, Investcorp’s SCG acquires minority interests in alternative asset managers, particularly GPs that manage longer-duration private capital strategies. SCG has completed 12 investments since inception.
Anthony and I had a fascinating conversation about the evolution of GP stakes and the benefits of GP stakes for investors. We covered:
Why have stakes shifted from hedge funds to alternative asset managers?
Why the features of the alternative asset management business model (contracted management fees, locked-up capital, less key-person risk) can make for a good GP stake investment.
Why a GP would sell an equity stake in its firm to finance its growth.
Why a GP stake investment is a cash in, not a cash out for the GP and its team.
Unpacking the middle-market GP landscape and where middle-market GPs need help growing their firm.
The evolution from fund to firm and what’s next for GP stakes.
Anthony Maniscalco is the Managing Partner and Business Head of Investcorp Strategic Capital Group (ISCG), based in New York. ISCG is focused on providing capital solutions to the GPs of mid-sized private market alternative asset managers. ISCG closed its inaugural fund in the Spring of 2022 and currently manages over $2.2 billion of AUM. In his current role, Mr. Maniscalco is focused on managing the overall business, sourcing new investment opportunities, advising portfolio GPs and is the chairperson of the Investment Committee.
Prior to his current role, Mr. Maniscalco was a Managing Director and Co-Head of Credit Suisse Anteil Capital Partners. Prior to this, he was Managing Director of the Hedge Fund Solutions business at The Blackstone Group. At Blackstone, he was a founding member and on the investment committee of Blackstone Strategic Capital Holdings, a USD 3.3 billion private, permanent capital vehicle focused on acquiring minority interests in alternative asset manager GPs.
Prior to Blackstone, Mr. Maniscalco was Head of Alternative Asset Management Banking at Barclays (and its predecessor Lehman Brothers) within its Financial Institutions Group. Prior to this role, Mr. Maniscalco was head of the Media and Telecom vertical within Lehman Brothers’ Leveraged Finance Group.
Early in his career, he worked at Bank of America and its predecessor Continental Bank in Chicago, focused on high-yield, mezzanine, syndicated bank loans, and interim financing products.
Anthony holds a B.S. from Indiana University (2026 College Football National Champions!) and an M.B.A. from the University of Chicago.
Thanks, Anthony, for sharing your expertise, wisdom, and passion about GP stakes and the business of alternative asset management.
Show Notes
00:00 Live From SuperReturn
00:27 Meet Anthony Maniscalco
02:22 Early Stakes Were Hedge Funds
04:03 Private Equity Stakes Inflection
04:56 Why GP Stakes Invest Well
05:19 Locked-In Fee Cashflows
05:58 Carry And Diversification
06:34 Where LPs Bucket Stakes
07:32 Today’s Allocation Buckets
08:29 Stakes As Strategic Access
09:05 The LP-GP Flywheel
10:12 Catalyzing Fundraising Growth
10:40 Capital Formation Support
11:32 Underwriting Growth Readiness
12:05 Scalability And Persistence
12:57 Primary Capital Use Of Proceeds
13:12 Why Sell Expensive Equity
14:33 Equity Plus Prefs And Debt
14:56 Barbell Market And Wealth
15:35 Talent Retention And Next Gen
16:41 Wealth Channel Strategy Fit
17:21 Underwriting Middle Market Plays
19:31 Portfolio Construction Framework
19:56 Where Buyout Works Today
20:59 Why Venture Is Harder
22:13 Hardest Middle Market Questions
23:11 What Creates Manager Edge
24:03 Fund Three Minimum Rule
24:57 From Fund To Firm
26:15 Liquidity And Exit Paths
27:20 Deal Level Vs Fund Liquidity
28:15 Strategic Buyers And Realizations
28:54 Fund Leverage And Bonds
29:24 Rise Of Prefs And Debt
30:16 Multi Solution Stakes Platform
31:02 GP Stakes For Wealth Investors
32:09 Downside Protection And Speed
32:47 Still Upside With Equity
33:25 Alignment Is Everything
34:36 Cash In Not Cash Out
35:38 Do Stakes Improve Performance
36:43 Growth Keeps Firms Stable
37:08 What’s Faster And Slower
37:29 Is The Market Really Crowded
38:23 Mid-Market TAM Opportunity
39:47 New Liquidity Tools Emerging
40:20 Continuation Vehicles Boost Economics
41:04 CV Market Impact On Stakes
42:03 Helping GPs Launch CVs
43:06 When M&A Returns
Disclaimer: Alt Goes Mainstream is an independent podcast and newsletter focused on the private markets industry. It is published for informational and educational purposes only and does not constitute investment advice, financial advice, legal advice, or any other form of professional advice. Nothing contained herein should be construed as a recommendation to buy, sell, or hold any security or investment product. Some companies, individuals, or organizations featured or mentioned in this newsletter may be current or past sponsors of Alt Goes Mainstream. Sponsorship does not influence editorial coverage, but readers should be aware that a relationship might exist. The author may hold direct or indirect investments in companies, funds, or other entities mentioned in this podcast or newsletter.
Comments
Nothing yet. Say the first thing.
Sign in to join the conversation.