Co-Investment
A co-investment is a direct investment made alongside a fund manager (general partner) into a specific portfolio company, typically on more favourable economics than the fund's standard fee structure. Co-investments allow family offices to concentrate capital into highest-conviction opportunities while preserving the diligence and operational support of the GP.
Co-investment rights are negotiated as part of a fund commitment and vary widely. Anchor LPs, large-cheque LPs, and strategic LPs typically receive priority co-investment offers. The economics are usually fee-light: reduced or zero management fee, reduced or zero carried interest, in exchange for committed capital and timely decision-making.
Co-investment is increasingly the practical middle path between full direct investing (which demands operational capability most offices lack) and pure fund allocation (which dilutes returns through layered fees).
Deeper reading
Family office asset allocation benchmarks: how $50M, $500M and $2B portfolios differ
Family offices at $50M allocate 47% to public equity; those above $1B drop to 28% and triple alternatives. We analyse structural drivers, institutional comparisons, and policy ranges across three AUM tiers.
Direct investing for family offices: a due diligence framework from sourcing to exit
A comprehensive framework for family offices conducting direct investments: sourcing methodologies, four-stage due diligence, team sizing by AUM, term negotiation, board governance, and exit discipline with jurisdiction-specific considerations.
Direct Investing vs Fund Allocation: A Decision Framework for Family Offices
Three operating-model questions decide whether direct investing or fund allocation is the more honest answer for a given family office. The wrong choice is rarely loud — it just compounds slowly.
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