Key Takeaways
- • The primary source is a JD Supra page for a BakerHostetler article on private equity co-investment, but the fetched text contains only navigation and sign-up boilerplate, with no article body.
- • Publisher context describes co-investments as minority equity stakes in privately owned companies made alongside a PE fund, often allowing co-investors to avoid management fees and carried interest.
- • Publisher context states that co-investments can provide LPs with flexible deal funding for GPs, lower fees and more control, and that incorporating them into a diversified PE program yields significant fee savings versus a program of direct funds only.
- • Publisher context suggests a co-investment policy written into fund PPMs and LPAs is the recommended approach for protecting GPs while meeting LP demand.
Summary
The source material available for this story is limited. The primary article, published by BakerHostetler and syndicated on JD Supra, is titled "Co-Investment: How Private Equity Firms Can Protect Themselves and Still Make Their Investors Happy." The captured text includes only site navigation and a sign-up prompt, so the article's specific arguments and examples cannot be confirmed from it.
Publisher context on the same topic provides the general framework. A private equity co-investment is described as a minority equity investment made directly into a privately owned company alongside a PE firm. Co-investors can benefit from the sponsor's due diligence and value-creation capabilities and, by investing directly, often avoid management fees and carried interest. For limited partners, co-investments are presented as a cost-effective route to direct private equity exposure, with one source noting that incorporating them into a diversified PE program can yield significant fee savings compared with a program made up only of direct fund commitments.
For general partners, the same material notes that co-investments provide flexible deal funding and that engaged LPs tend to remain loyal. The recommended protective approach is to include a general co-investment policy in the fund's private placement memorandum and limited partnership agreement, which is the mechanism the title suggests for balancing GP interests with LP expectations. Specific policy terms, allocation mechanics, and any regulatory considerations are not confirmed by the available text.
Publisher context on the same topic provides the general framework. A private equity co-investment is described as a minority equity investment made directly into a privately owned company alongside a PE firm. Co-investors can benefit from the sponsor's due diligence and value-creation capabilities and, by investing directly, often avoid management fees and carried interest. For limited partners, co-investments are presented as a cost-effective route to direct private equity exposure, with one source noting that incorporating them into a diversified PE program can yield significant fee savings compared with a program made up only of direct fund commitments.
For general partners, the same material notes that co-investments provide flexible deal funding and that engaged LPs tend to remain loyal. The recommended protective approach is to include a general co-investment policy in the fund's private placement memorandum and limited partnership agreement, which is the mechanism the title suggests for balancing GP interests with LP expectations. Specific policy terms, allocation mechanics, and any regulatory considerations are not confirmed by the available text.
Go deeper than the headline
Research every firm in this story, track the ones that matter and get the daily briefing — free for 7 days.