No fewer than four examples of GP stake sales of minority interests in private equity firms’ management companies have emerged over the past two weeks – one of these being the sale of a stake in a GP stakes firm itself.

The latest example is UK mid-market buyout firm Inflexion Private Equity, which on Thursday said it had agreed to sell a passive minority stake in Hunter Point Capital. Inflexion will use proceeds from the transaction to grow its mid-market strategy in Europe.

Inflexion’s stake sale is the second in two weeks for New York-headquartered Hunter Point, which last month said it had agreed to acquire an interest in the management company of L Catterton. Other deals include growth equity FTV Capital, which was reported to be in advanced talks to sell a stake to Blackstone; and Armen, a Paris-headquartered GP stakes firm, which sold an interest in itself to a consortium of French family offices, as we reported last week.

What is the difference between taking capital from one GP stakes firms over another? That’s the question the PEI editorial team has been putting to all the major firms (and some minor ones) active in GP stakes over the past week for a special report on the topic. We wanted to know: do they also provide LP capital on top of management company equity capital? Do they only provide equity, for that matter? Do they always take board seats? What are the restrictions on the capital they provide? Is there much deviation in how transactions are structured? What is their exit strategy and how much does this matter to the GP recipient of the capital?

In our reporting so far, we have discovered there are a few main parameters that GPs use when assessing their potential partners. The main one is the size of the stake they want to sell and its dollar value, as this is a first step in narrowing down the pool of potential buyers.

Other parameters include existing relationships the GP stakes firm has; the perceived strategic benefits the GP will gain from selling a minority stake; and social fit.

“It’s never really all about the economics,” says Saul Goodman, head of Evercore’s global alternative asset management practice. Most of the firms who sell a minority stake don’t need the incremental capital, he says, adding that it is of course positive to receive and  that much of it goes back into the GP’s business. “Each has some perception of what a strategic relationship can bring and it is different for everyone – aid in fundraising, launching a new product, advice on a retail strategy, ESG matters, generational transfers, HR matters, procurement savings, best practices” among others, he adds. “The GP stakes funds have been successfully bringing these benefits to their investments for many years now.”

Social fit, or whether there’s chemistry between the two firms, can often be a deciding factor, according to Thomas Liaudet, who leads Campbell Lutyens’ GP stakes advisory business. A buyer may tick all the boxes: valuation expectations, structuring, enough money to back the transaction, and yet might not be a good cultural fit.

“If I’m a GP, I’m going to have this group as a shareholder in the long term – it’s an open-ended partnership. I’m going to interact with them at least once a month or sometimes more. I need to get along with them.”

Keep an eye on PEI next week for our GP stakes capital: Spot the difference report.