Co-investment: a promising alternative to traditional private equity vehicles?
During 2022, the number of private equity funds decreased significantly from 1,129 to 5971. This was due to LPs becoming more careful about investing money and concentrating on experienced managers. Consequently, newly establishloed managers faced significant challenges, with the fundraising for first-time private equity funds reaching its lowest point in the past nine years. To fill the equity gap, GPs turned to the co-investment market. This strategy also enabled PE managers to dedicate additional time to raise their subsequent commingled funds. Additionally, some GPs used co-investments to diversify their portfolios and extend their investment period, allowing them to be out of the market for longer.
Moreover, debt…
