Giannini: Most institutions lack the resources to pick direct co-investments
Mario Giannini · Mario Giannini & John Toomey – Private Equity Panel (Capital Allocators EP.309) · Apr 17, 2023 · at 1:00:03
Mario Giannini (Hamilton Lane CEO) discusses why LPs struggle with co-investments due to staffing constraints and adverse selection risks.
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“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, you're diversified, or have someone else do it because there are so few investors, one, that have the resources to do it, and two, that are willing to take that risk because your bad deals tend to go bad sooner than your good deals become good deals.”
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