Co-Investments Guide: Issue Spotting and Negotiation

Investors of many different stripes are eager to participate in private equity transactions as equity co-investors alongside experienced private equity sponsors, making the market for co-investment opportunities a competitive one. A user-friendly reputation and an ability to execute on deals quickly can be an important factor in attracting and securing these opportunities. Co-investors typically enter the scene later in the overall timeline of a transaction, after the sponsor has sourced the deal, completed substantial due diligence, and made significant progress in negotiating terms with the target company. Given these circumstances, co-investors may be asked to review and respond to draft documentation on short turnaround times, making decisions about what truly matters, what is a “nice-to-have,” and what they can live without in the deal’s terms.

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Related Content

• Co-investment Programs: The Co-investor's Perspective
  Read this examination of the benefits and disadvantages of co-investing from an investor’s perspective, and what an investor should expect from co-investment due diligence, negotiation, and structuring.
• Co-investment Programs: The Sponsor's Perspective
  See this overview of co-investments from the sponsor’s perspective that includes reasons to co-invest, disadvantages of co-investing, establishing a co-investment program, the co-investment process, structuring options, and regulatory and compliance concerns.
• Co-Investment Rights Side Letter Clause (Private Equity Fund)
  Review this side letter clause that grants an investor a right to participate in investments made by a sponsor outside or alongside an existing private equity fund.

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