Co-Investment
Co-investment is a direct investment opportunity offered to LPs alongside a fund’s main investment, often with lower fees.
Definition
Co-investments allow LPs to invest directly in a specific deal in addition to their fund commitment, typically to increase exposure or control fee drag. Allocator Context Common among institutional LPs and larger family offices with the capacity to evaluate deals quickly. Often used to scale exposure in preferred sectors or managers. Decision Authority Co-investments usually have separate approval paths due to speed requirements and concentration risk, often requiring dedicated committees or fast-track governance. Why It Matters for Fundraising Managers who can offer credible co-invest access may increase LP stickiness, but must manage fairness, speed, and allocation discipline. Key Takeaways Deal-level exposure for LPs Faster approvals required Concentration risk is higher Governance and fairness matter