A Blackstone Group LP fund that takes minority stakes in alternative-asset managers is buying a piece of private equity firm Leonard Green & Partners.

The Blackstone pool will own less than 15 percent of Leonard Green, people familiar with the deal said. Blackstone, which has previously used the fund to buy parts of four hedge-fund managers, was in discussions with Los Angeles-based Leonard Green for more than a year, said the people, who asked not to be named because the process was private.

“We had looked at dozens of potential private equity deals in the past,” Tom Hill, Blackstone’s vice chairman, said in an emailed statement. “Leonard Green & Partners is the firm we wanted to partner with given their track record of investment excellence, the diversity of their business, and the quality and depth of the management team.”

A Leonard Green spokeswoman confirmed the sale of a minority interest and declined to comment further.

Blackstone is doing the deal out of Blackstone Strategic Capital Holdings, a $3.3 billion pool raised in 2014 to buy pieces of alternative-asset managers. The fund owns stakes in hedge-fund firms Marathon Asset Management, Magnetar Capital Partners, Solus Alternative Asset Management and Senator Investment Group.

While they’ve been done for decades, sales of private equity firm interests are gaining momentum as the practice becomes a more ready source of liquidity. The strategy has been honed by firms such as Neuberger Berman Group’s Dyal Capital Partners and Goldman Sachs Group Inc.’s Petershill unit, both of which are currently raising money for the approach.

The private equity industry is maturing, and at firms founded in the 1980s, some general partners are seeking liquidity. In April, the Riverside Co., one of the most active private equity firms in the middle market, sold a minority stake in the firm to Parkwood LLC, a private trust company. In May, Accel-KKR sold a minority equity investment in the firm to Goldman Sachs Asset Management’s Petershill program.

-- Additional reporting by Mergers & Acquisitions' Demitri Diakantonis

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Private equity firms including Vista Equity Partners, Silver Lake, Riverstone Holdings and ArcLight Capital Partners have sold minority interests in themselves for various pursuits. Some firms use the capital to grow their business or commit more money to their funds, while others use the proceeds to cash out aging founders. For investors, buying a minority interest provides a slice of ongoing fee income from the underlying asset managers.

It’s a newer phenomenon to see private equity stakes sold to a business already housed within a private equity firm, as is the case with Blackstone’s deal. AlpInvest Partners, the fund-of-funds unit of Carlyle Group LP, is looking at opportunities to take minority stakes in private equity firms, according to a person familiar with the matter. The firm hired Sean Gallary in February from Tunbridge Partners to spearhead the approach.

Buyout firms that sell stakes need to ensure that they properly disclose the effects of changed ownership to their investors, said David Fann, the chief executive officer of TorreyCove Capital Partners, which advises pension plans that invest in private equity funds.

“I’m equally concerned whether a firm sells a stake to a large asset manager or a business within another private equity firm -- it’s all about disclosure and changing alignment,” Fann said. “Almost every general partner in the world at some point thinks about how to sell off a piece of the management company, and it becomes an exercise in comforting the investors that conflicts will be sufficiently managed.”

Leonard Green focuses on investments in retail and consumer, health care and wellness, business and consumer services, and distribution. Led by managing partners John Danhakl and Jonathan Sokoloff, it raised $9.6 billion for its seventh fund last year, $500 million of which came from the firm’s partners. Danhakl and former managing partner Peter Nolan were bankers at Donaldson Lufkin & Jenrette in the early 1990s, when Tony James, now Blackstone’s president, helped lead DLJ’s banking group.

Peter Grauer, chairman of Bloomberg LP, the parent of Bloomberg News, is a non-executive director at Blackstone.

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