What does co investment mean?

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 do co-investment funds 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 strategy?

While investing through. a fund-of-funds provides investors with exposure to hundreds of underlying companies, co-investing involves investing directly into a single company. LPs can counter this concentration risk by building a diverse portfolio of co-investments to supplement their broader private equity commitments.

What is a Coinvestment vehicle?

Coinvestors typically participate in target transactions through capital commitments to a sponsor-controlled vehicle (the coinvestment vehicle) which is under common control with the main fund alongside which the coinvestors are participating.

What are the types of alternative investments?

Alternative investments include private equity or venture capital, hedge funds, managed futures, art and antiques, commodities, and derivatives contracts. Real estate is also often classified as an alternative investment.

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What is a good Moic?

MOIC is important for performance reporting because of its simplicity. It is easy to understand that a multiple of 1.50x means that the principal investment amount has increased in value by 50%. This metric, which is directly tied to the dollar amount invested, is often a more digestible performance indicator than IRR.

What is a GP vs LP?

Limited Partners (LP) are the ones who have arranged and invested the capital for venture capital fund but are not really concerned about the daily maintenance of a venture capital fund whereas General Partners (GP) are investment professionals who are vested with the responsibility of making decisions with respect to …

How much do private investors charge?

Private equity firms normally charge annual management fees of around 2% of the committed capital of the fund. When considering the management fee in relation to the size of some funds, the lucrative nature of the private equity industry is obvious.

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. Francesca Braganza looks at the latest data for private equity fund of funds managers considering co-investments.

What is a hedge fund co-investment?

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 …

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Why do you think that GPs would allow or encourage their LPs to co invest alongside them?

GPs believe that co-investments provide a way for them expand and deepen their relationships with their LPs. Because co-investments can be attractive opportunities, GPs typically offer them preferentially to their fund investors (LPs), rather than broadly seeking co-investors.

What is joint investment?

How do joint investment accounts work? Joint investment accounts allow two or more people to invest together. You can invest in just about anything with a partner, including stocks, bonds and funds; property (such as vehicles); or real estate. Combined ownership in financial assets is referred to as joint tenancy.

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