Stonyrock Partners enters the GP stakes market

Oak Hill Capital Partners has sold a strategic minority interest to the newly formed Stonyrock Partners.

The deal was the first for Stonyrock, which was formed this year by ex-Blackstone Group managing director Craig Schortzmann and Sean Gallary, former managing director at Carlyle. The firm is raising its first fund with a target of $1 billion, and will focus on investments in GP minority stakes in mid-market alternative asset firms.

Oak Hill Capital Partners is a mid-market private equity firm with around $8 billion in AUM, according to sister publication Private Equity International, and three offices across the US. Since 1986, the firm has completed more than 90 investments across industrials, services, media and communications, and consumer, retail and distribution.

There is a growing market for GP minority stake sales and the larger end of this market is dominated by three players: Dyal Capital Partners, Blackstone and Goldman Sachs’ Petershill Funds. The trend is now growing in the mid-market, with firms including Marlin Equity Partners, Siris Capital Group and GI Partners completing sales of minority stakes this year.

Financial details of the Oak Hill transaction were not disclosed. However, Evercore’s Saul Goodman, who spoke to Private Funds CFO earlier this year, said most of these deals involved minority stakes of “under 20 percent”.