Data room: The appeal of co-investments

Affiliate title Private Equity International’s LP Perspectives 2022 Study shows that appetite for co-investment remains high, with almost two-thirds of investors planning to invest directly alongside their GPs throughout 2022.

“Demand for co-investment has continued to increase year-on-year from both sponsors and investors,” says Craig MacDonald, a managing director in HarbourVest’s co-investment team. The appeal is clear: access to top sponsors, enhanced diversification, pre-screened dealflow and reduced fees and economics, according to fellow HarbourVest managing director Corentin du Roy.

“Co-investments can offer participants diversified exposure to high-quality deals at favorable economics,” adds David Brett, partner and head of co-investments at Adams Street Partners.

Bart Molloy, partner at Monument Group, says: “We have seen co-investment move from being a nice-to-have to an essential requirement for many limited partners,” adding that increased appetite is leading many GPs to think carefully about how they manage their investor base.