Governance - Co-Investments

Co-Investments were historically popular in Private Equity and Real Estate funds but are now increasingly popular in other liquid and illiquid alternative investment strategies. There are many reasons why co-investments may be made including enhancing the fund’s strategic position, scalable overflow of “best ideas” positions, or housing illiquid investments. Where managers grant co-investment rights, there need to be adequate processes in place to address governance and compliance challenges.

This memo addresses:

• The co-investment landscape in alternative investments,
• The key governance and compliance challenges and investor concerns,
• An illustrative co-investment process to address these challenges and concerns, and
• Considerations such as structuring, fees and expenses, and investment risk disclosure.