Co Investment

“We stood up a co-investment portfolio earlier this year. We're crawling with it right now. Over the next two years, I'd like to walk. I don't know if we'll get to run, but we'd like to walk with it.”

“What we would do differently is lean a lot heavier into co-investments, direct investments. We have a fairly sizable allocation, high single digits. That's where the alpha would be when you get to that size is being able to do more concentrated single name pos…”

“Oftentimes a pension fund will say, oh, we're really innovative. We're an amazing partner to our funds. They bring us a co-investment and we respond in 15 days. I have to remind them, what you've just described is speed and efficiency. It's the opposite of inn…”

“We don't try to re-underwrite the deal. We've already underwritten this manager, we've already backed them, and we trust them.”

“Now, co-investment is about 30 to 40 cents of every dollar that's invested in the industry.”

“The way we run it today is the way I think people should run their, only in conviction, when your funds are investing alongside of it, that's when you do the co-investment. You don't do it the way we did it in twenty-twenty.”

“I always find it interesting that people view it as a conflict of interest for the investment team to invest alongside whoever's capital you're investing. Structured correctly, I think that should be essential. You want people to have more than just their psyc…”

“And the co-investments is a great way, sort of de-risked companies later on in the life cycle is a great way to not only shorten the J curve a little bit, But also maybe a higher return because some, you know, a lot of the times co-investments tend to be lower…”

“When we're shown, for instance, a co-investment, we can respond within a couple weeks.”

“So I will sell my old funds to reinvest in the new funds so I can generate co-investment business. And old funds don't generate co-investment business. Many LPs these days have very active co-investment program, so they would do it for that reason.”

“Well, first of all, like from a fee perspective, and we have like over a hundred, it's maybe a 130 or so direct investments. I think, I mean, essentially no management fee, like 10 basis points blended. And the carry is like seven or eight percent, which is th…”

“If you think of, like, our vehicle, right, it's about 20, 25% co-investments. So at the full, and we've raised these vehicles every 18, 24 months, but at the high level, it's like a co-investment will be, it will max out around two percent exposure, but it's p…”

“Fundless sponsors in today's market, mostly because it solves for private equity exposure without the unfunded commitment leverage, and as does co-investments. So for us, it's more driven by solving for unfunded than fees.”

“This is a, one of those tools that could help chip away that in the future, somebody would think, Actually, the way to buy a home is to have a co-investor in it until I can be a full owner versus needing to be an owner right off the bat.”

“We've seen already an uptick in the deal flow on the co-investment side. So although overall private equity deals are down, managers, because they're either overcapitalizing from the equity standpoint, or they're reserving more than they once did, or they now …”

“The reality is for most institutions, not all, but for most institutions, they're simply not resourced enough to do co-investments. And so our view is they either ought to do every co-investment that walks in the door and just make sure you do enough of them, …”

“If you're going to do it, be prolific because you want to actually create your own pseudo venture fund. And what we've found where they haven't had success on it is when you're doing one a year or two a year.”

“Some people believe that co-investment in its own right is negatively selected. I don't, patently don't believe that because almost every single deal we do is because somebody needs more money. Never because like, oh, our normal equity check is a hundred, but …”

“You shouldn't have all your positions from your funds as two and a half million dollar positions and a bunch of your co-investment positions as five, seven halves and tens.”

“We're never going to become a direct investor. It's going to be a, I think our edge ultimately is forging these long-term partnership relationships with managers. And what we're trying to do is leverage those over time to develop some of these co-investments t…”

“We pass most times when there's a management fee and a carry, because then it's just a fund of one idea, and that's not great.”

“The person who was on that point on the manager relationship, everything that that manager, this is the best set co-investment opportunity. We've got to buy this secondary at one Oh five because they're such a great manager. And so really from the beginning, W…”

“On the co-investment side, what we found they value the most is, frankly, a quick no is always better than an elongated no. And so we just have this commitment, you know, 24 hour period, we will get back to the manager with a quick read.”

“So for the beginning of the industry until the last 10 years, if you really wanted to invest in private equity, your choices were generally a ten-year limited partnership. You would make an investment up front, and then the manager would invest and create liqu…”

“Those are great managers, and there are lots of great deals out there, but blended, cumulatively, hard to earn, very high returns on what's essentially commodity capital. But if we can deliver co-investment capital to a corner of the market that's not getting …”

“So I think that the whole co-investment phase is going to be a great opportunity for many of the restructuring funds because people are just paying way up. They're pricing some of these deals at perfection. You have people who don't have the resources that are…”

“That would suggest you should go do that here, but we're not, and it's a function of the complexity that it brings. We're not set up structurally from a resourcing point of view. We're not set up from an operational point of view, from a tax point of view. We'…”

“Honestly, our first co-investment we did, we made really good money, but in hindsight, we missed some things, and if we were intellectually honest, I would say it was a bad investment decision”

“We're not re-underwriting the investment the way some of our peers have. We don't feel we can bring anything to that party. We underwrote the manager, and that's where our due diligence ends as far as the underwriting is concerned.”

“The historical data on co-investments is, they are pro-cyclical, And they don't turn out well.”

“We're typically not going to do a co-investment in a equity name, because we don't, we can't do the work to go and be able to say, we don't have 12 people to put on a stock and say, go look at the balance sheet, go meet with the management team.”