18 Dec 2019

Governance - Co-Investments

Governance and compliance processes for co-investments addressing structuring and expense allocation

Co-Investments were historically popular in Private Equity and Real Estate funds but are now increasingly popular in other liquid and illiquid alternative investment strategies. There are many reasons why co-investments may be made including enhancing the fund’s strategic position, scalable overflow of “best ideas” positions, or housing illiquid investments. Where managers grant co-investment rights, there need to be adequate processes in place to address governance and compliance challenges.

This memo addresses:

  • The co-investment landscape in alternative investments,
  • The key governance and compliance challenges and investor concerns,
  • An illustrative co-investment process to address these challenges and concerns, and
  • Considerations such as structuring, fees and expenses, and investment risk disclosure.