While limited partners continue to chase opportunities to co-invest alongisde general partners, the dealmaking community retains a tight grip on joint deployments.
“It’s something that we’re open to on a case-by-case basis,” says Beringer Capital managing partner Gil Ozir, whose firm closed its largest fundraise to date with $307 million in capital commitments for its digital transformation-focused fund earlier this month. “In some ways can help you get into larger transactions because there’s more equity you can [deploy].”
Consumer sector-focused PE fund Traub Capital Partners’ co-founder Brian Crosby says LP appetite for co-investment remains “huge,” driven by the attractiveness of reducing costs while sharing diligence with LPs.
Indeed the burden-sharing aspect of co-investment continues to come up in interviews as a singular attraction.
“What’s even better is—are there ways it can be a win-win with a strategic angle?” Ozir asks. “A lot of LPs may have their own businesses or institutional investors may have other portfolio comapnies and relationships. Can we find synergies where those LPs are bringing more than money? Skills, knowledge, opportunities; that’s the win-win.”
Churchill Asset Management recently closed on a new PE fund, telling Mergers & Acquisitions its co-investment vehicles have deployed $2.6 billion “across 195 equity co-investment transactions since 2011.” The sheer volume of deals implies the trend is still in full swing.