This article was originally published in The Legal Special
2013 - A Private Equity International Supplement. It is
reprinted here with permission.
Interest in co-investment rights has spiked recently as
institutional and other fund investors have sought to enhance their
capital deployment, lower expenses and corner differentiation
opportunities. These goals can be accomplished with a successful
co-investment programme whereby investors garner co-investment
rights, build analytical capabilities and streamline procedures for
quick action.
This article examines common considerations and complications of
co-investments. For simplicity, it hypothesises a middle-market
leveraged buyout fund manager (Manager) going to market to raise an
institutional fund (Fund 2) after successfully deploying the
capital of their prior fund (Fund 1).
