What is Co-Investment?
Co-investment is an investment opportunity structured by a private equity house, in which an investor has the discretion to participate on a deal-by-deal basis. The most common reason to arise for co-investment opportunities is that the investment is too large for the private equity fund and could create risks that outweigh the benefits, or where the investment would breach restrictions on diversification requirements previously agreed with investors. Family offices and high net worth individuals (HNWIs) are typically interested in co-investment opportunities as they permit access to opportunities that may otherwise be beyond their reach.
A current trend
Private equity houses will typically open co-investment opportunities to other private equity houses, entrepreneurs, industrial groups or wealthy families. In recent years, wealthy families with entrepreneurial backgrounds have increasingly been seeking private equity investments and have been looking for co-investment opportunities with other families or institutions.
Co-investment through the Jersey Private Fund
The Jersey Private Fund (JPF) was introduced in April 2017 and is a story of innovative success. Ideally suited to private fund raises and smaller investor bases, the JPF offers a streamlined and appropriate regulatory process, providing a quick, efficient and cost-effective route to launch. Numerous private equity, venture capital, real estate, technology and credit fund promoters have benefitted from the regime and use it successfully for co-investment structures.
Benefits for the private equity house
Benefits for the HNWI/family office
Benefits of Jersey Private Funds