Gregory Hardiman, Crescent Capital

Welcome to Lender Lens, our series for profiling leaders in the Lender community.

With private credit playing an increasingly important role in the financial system, we wanted to find out how lenders are navigating the evolving landscape and how they assess the market in the coming years.

Dealmaking has become more complex in today’s market — and private credit is adapting.

We’re talking to you today because you’re leading a new GP financing business at Crescent Capital. Can you tell us what the opportunity looks like in this space, and where you think the business will be in 3-5 years?

GP financing provides non-dilutive growth capital to support reinvestment, platform expansion, and generational transition for private fund managers. At Crescent, we are focused on working with private equity sponsors across the middle market, aligned with the longstanding focus of our broader private credit platform.

GP financings are growing in importance as part of the capital structure for these sponsors. The business of running a private equity firm has become increasingly capital intensive as successful groups are raising larger successor funds and are often seeking to maintain or increase the percentage of their GP commitment.

The other big factor is generational. We have observed that middle market sponsors are often capitalized primarily by their original founders or the current managing partners. Over time, the next generation of firm leaders needs to fulfill much larger GP commitment obligations and ultimately obtain meaningful ownership of their firm in most cases. These underlying demand drivers are only becoming more acute and set the stage for a robust opportunity set for GP financing providers over the next 3-5 years.

What do you see as Crescent’s edge in GP financings—whether it’s deal sourcing, structuring expertise, relationships, or capital flexibility?

In short, it’s the combination of franchise-level relationships and insights across the private equity landscape, combined with the depth of our structuring expertise and experience specifically in GP financing.

Crescent has been one of the premier sponsor-focused private credit platforms for over the past three decades, having completed more than 600 investments with over 290 sponsors. Today we benefit from a deep network of over 1,500 private equity sponsor relationships and typically review more than 1,000 opportunities per year. We believe we are viewed by the sponsor community as a creative solutions provider with a partnership-oriented approach, and believe this positioning provides a strong foundation to pursue opportunities in GP financing, an area of the market that is bespoke, undersaturated and distinctly predicated on sponsor relationships given the intimacy of these transactions.

The Crescent GP-LP Solutions team brings a wealth of direct experience in the space, having historically executed over 30 bespoke GP-LP financing transactions representing approximately $4 billion in volume.

What is it about the current fundraising and liquidity environment that makes GP financing so relevant right now?

We focus on the fundamental drivers for our market and the value proposition for GP financing within an organization. We have designed our strategy with that long-term framework in mind and have observed that market growth to-date has largely been driven by adoption.

That said, the uneven environment for both fundraising and monetization only exacerbates the near-term need for growth capital at well-performing sponsors that are continuing to successfully raise and deploy new capital. Through non-dilutive GP financings, we can help sponsors demonstrate conviction and incentivize and retain their key personnel, which we believe can support broad-reaching positive impact for the firm.

Which types of sponsors or fund sizes represent the most attractive opportunities?

We focus on partnering with established, well-performing buyout sponsors across the middle market. This is where Crescent has deep relationships and insights into underlying portfolio companies and industry sectors. Rather than segmenting the space simply by fund size, we look for institutionalized sponsors with strong governance, proven track records, and depth of resources. We stick with the time-tested adage of investing in what you know.

What have you learned about yourself as a leader through the process of launching this strategy?

We focus on partnering with established, well-performing buyout sponsors across the middle market. This is where Crescent has deep relationships and insights into underlying portfolio companies and industry sectors. Rather than segmenting the space simply by fund size, we look for institutionalized sponsors with strong governance, proven track records, and depth of resources. We stick with the time-tested adage of investing in what you know.

^{This article expresses the views of the author as of the date indicated and such views are subject to change without notice. Neither the author nor Crescent Capital Group LP (“Crescent) has any duty or obligation to update the information contained herein. Further, Crescent makes no representation, and it should not be assumed, that past investment performance is an indication of future results. This article is available for information purposes only and should not be used for any other purpose. The information contained herein does not constitute and should not be construed as an offering of advisory services or an offer to sell or solicitation to buy any securities or related financial instruments in any jurisdiction. Nor is the information intended to be nor should it be construed to be investment advice. This article, including the information contained herein, may not be copied, reproduced, republished, or posted in whole or in part, in any form without the prior written consent of Crescent.}

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