Investor appetite for co-invesments on the rise
New report shows more institutions prefer direct deals to passive exposure.
BY Caroline Cakebread | April 18, 2017
More institutional investors are are now looking at co-investment as the best route to private equity according to a new report from Cerulli. The main advantage is the ability to select the private equity investments they participate in as opposed to a passive approach according to the report. Not surprisingly, co-investments are drawing the most interest from the biggest institutional investors with assets under management of US$10 billion or more – of these, 58% had already co-invested or would consider co-investing. Smaller institutions are less likely to look at co-investments — only 35% of those with assets between US$1 billion and US$10 billion say they would consider co-investing.
What are limited partners looking for? Cerulli’s report shows that most want to either boost or maintain their exposure to co-investments in the future — and they are looking to make more investments and commit more capital to these kinds of opportunities.
Research shows that most limited partners are looking to either increase or maintain their exposure to co-investments in the future, with the aim of making more investments and committing a greater volume of capital to these types of opportunities.