Adams Street’s Michael Taylor, Partner, Co-Investments, shares insights on why adding a private equity co-investment allocation to existing portfolios can be an attractive option.
Private equity co-investments is a strategy that can provide many distinct advantages for those seeking exposure to private market opportunities for a typically all-in lower cost.
By acquiring passive, minority stakes in a range of companies, private equity co-investment strategies participate in the lead GP’s highest conviction ideas while not having to play an active role in the management of the purchased company.
This means private equity co-investment managers can build portfolios that are diversified across sector, geography, and time by partnering with lead GPs with specific skills and experience in a particular sector, be it US technology, European healthcare, or Asia industrials.
Lead GPs typically don’t charge their co-investor partners management or performance fees, making the cost of investing in such a strategy an attractive option.