Investors are increasingly turning to private equity co-investments for outperformance, with 85% reporting better returns compared to traditional fund investments. The allure of higher performance and reduced costs is driving this trend, with 75% of investors citing performance potential as a top advantage. Fund managers, on the other hand, see co-investments as a way to strengthen relationships, despite concerns about deal delays and potential negative impacts on non-co-investor relationships.
Ignatius Fogarty, head of private equity products at Preqin, emphasizes the growing significance of private equity co-investments. He highlights the eagerness of both investors and fund managers to capitalize on higher returns and cost efficiencies offered by co-investments. Looking ahead to 2014 and beyond, the landscape of private equity investments is primed for greater emphasis on co-investments to maximize returns and foster stronger investor-manager relationships.
With 140 investors and 80 fund managers participating in the survey, the momentum behind private equity co-investments is clear. As the industry evolves, the strategic advantages of co-investments are poised to shape investment strategies and redefine relationships within the private equity space.
