What is the meaning of co-investment?

Broadly, a co-investment is an investment in a specific transaction made by limited partners (LPs) of a main private equity (PE) fund alongside, but not through, such main PE fund. This is often accomplished through a separately structured co-investment vehicle which is governed by a separate set of agreements.

How does a co-investment work?

In a typical co-investment fund, the investor pays a fund sponsor or general partner (GP) with whom the investor has a well-defined private equity partnership. Co-investments avoid typical limited partnership (LP) and general (GP) funds by investing directly in a company.

What is a co-investment in real estate?

General partners (GPs) of property funds grant fund investors – the limited partners (LPs) – the right to invest in certain assets that are not going to wind up in the fund.

What is hedge fund co-investment?

Co-investing is a newer concept for hedge funds. Private equity co-investments typically involve control private equity positions that are subject to the same factors that influence valuation of public equities.

What is a direct co-investment?

It is a way to execute a direct investment. Co-investing — a subset of direct investing, when an investor invests alongside a lead Sponsor to purchase ownership directly in an operating company. On every deal, a leading party sources, structures, and executes the transaction.

What is a co-investment vehicle?

For definitional purposes, a co- investment structure may be thought of as a vehicle that participates in an investment on a co-mingled basis or on behalf of a single investor alongside, or in lieu of, an investment manager’s main fund, which may be limited in the extent to which it can deploy capital in the pertinent

Are real assets?

Real assets are physical assets that have an intrinsic worth due to their substance and properties. Real assets include precious metals, commodities, real estate, land, equipment, and natural resources.

What are hedge funds?

A hedge fund is a pooled investment fund that trades in relatively liquid assets and is able to make extensive use of more complex trading, portfolio-construction and risk management techniques in an attempt to improve performance, such as short selling, leverage, and derivatives.

Can Fund of Funds Co invest?

Preqin data confirms a strong appetite for co-investments, with a vast majority of private equity fund of funds managers actively investing in such opportunites.

What is a co-investment platform?

The term ‘co-investment’ is often perceived as referring to institutional investors investing alongside their external asset managers in companies. These collaborative partnerships seem to be an important means of capitalising on an investor’s network.

How do I co invest in property?

When purchasing a property via home co-investing, buyers make a minimum initial investment in a home, similar to a down payment. Then a partner company co-invests, covering the remaining cost of the home. Payments are usually fixed for a set term and purchase equity back from the co-investing company along the way.