Welcome back to the Alt Goes Mainstream podcast.
Today’s conversation features a live podcast that takes place at BTG Pactual’s NYC office for an audience in private markets.
We are joined by Todd Owens, the Co-Founder and Managing Partner of Cantilever Group, where BTG Pactual is an investor.
Cantilever is an independent firm focused on providing capital solutions to middle market asset managers. The firm's capital can be used to accelerate growth, support acquisitions or liftouts, fund GP commitments, seed new strategies, facilitate generational ownership transfer, and provide liquidity to founders. Cantilever focuses on asset management firms that have enterprise values between $50M and $500M. The team has executed on over $500M of GP stakes, financing, and seeding transactions as both investors and principals. The team's advisory experience working with stakes funds includes over 15 GP stakes transactions, multiple GP stakes portfolio financings, numerous GP and BDC IPOs, and dozens of asset management financing and control transactions.
Cantilever is working with two strategic partners as they build their firm: BTG Pactual, the ~$30B market cap Brazilian bank and wealth and asset manager has invested into Cantilever’s fund, and Broadhaven Ventures, the principal investment arm of Broadhaven Capital Partners.
Todd has over 30 years of experience as an advisor covering financial institutions and as a senior financial services executive. Prior to founding Cantilever, Todd has been a Partner at Broadhaven Capital Partners, an independent financial services focused investment bank that’s completed over $100B in announced M&A transaction volume, as well as the former CEO of Fifth Street Finance. Todd began his career at Goldman, Sachs & Co, spending 24 years including as a Managing Director and Partner in the Investment Banking Division.
Todd and I had a fascinating conversation about the GP stakes space and why the middle market represents a compelling part of the asset management ecosystem as the industry undergoes change and consolidation. We discussed:
- The early days of alternative asset managers going public.
- The evolution of the GP stakes market.
- The role that GP stakes investing can play in the growth of alternative asset managers.
- How and why GP stakes has shades of private equity, private credit, and secondaries in a single strategy.
- A tale of two cities — the upper end of the market and the middle-market.
- What will liquidity look like in the GP stakes space?
Thanks Todd for sharing your wisdom and views on GP stakes and asset management.
Subscribe to Alt Goes Mainstream to receive the weekly newsletter every Sunday and all of AGM’s podcasts.
Show Notes
00:38 Welcome to the Alt Goes Mainstream Podcast
00:40 Live Podcast at BTG Pactual’s New York City Office
00:49 Introducing Todd Owens and Cantilever Group
02:26 Welcome to Alt Goes Mainstream Live
03:04 Todd's Background and Perspective
03:29 The Early Days of Minority Equity
04:28 Alternative Asset Managers Going Public
04:53 The Success of Public Offerings
05:32 Evolution of the GP Stakes Market
05:58 The Financial Crisis and Market Evolution
06:14 Understanding the Asset Management Business
06:47 Public vs. Private Market Perceptions
08:07 Middle Market Opportunities
08:37 The Role of GP Stakes in Firm Growth
09:05 Different Approaches to Building a Business
09:15 Lessons from advising Oaktree and Ares
09:27 Strategic Planning in Asset Management
10:14 Sophistication in the Middle Market
10:45 The Future of GP Stakes and Asset Management
11:48 Differences Between Upper and Middle Markets
14:46 Opportunities in the Lower Middle Market
16:03 The Persistence of the Middle Market
17:58 Wealth Channel and Private Markets
18:48 Evolution of Wealth Management
20:04 Democratization of Alternatives
20:24 GP Stakes as an Investment Strategy
20:54 GP Stakes: The Best of All Worlds?
20:59 Investment Strategies and Market Trends
22:08 Private Credit vs. GP Stakes
22:58 Betting on Private Markets Growth
23:17 Long Duration Capital in GP Stakes
23:47 Liquidity in the GP Stake Space
24:22 Managing Portfolio and Realizations
25:01 The Need for Liquidity Solutions
25:19 Quick Fire Questions
25:26 Favorite Asset Class in 2025?
26:06 Next Firm to Go Public?
26:16 Challenges of Merging Large Firms
27:21 Future of Middle Market GP Stakes
28:07 Conclusion: Live Podcast Wrap-Up
28:12 Thank You and Closing Remarks
Editing and post-production work for this episode was provided by The Podcast Consultant.
