Co-investment
Co-investment refers to when investment professionals or firms invest their own money alongside a private equity fund in a specific deal. It's like joining forces to make a bigger investment. Think of it as multiple investors pooling their money together to buy part of a company, with one main private equity firm leading the deal. This approach is popular because it allows investors to participate directly in specific deals they like, often with reduced fees, while private equity firms can make larger investments by bringing in trusted partners.
Examples in Resumes
Led co-investment opportunities resulting in $50M deployed across 5 deals
Analyzed and executed co-investment deals alongside major private equity firms
Managed due diligence process for co-investments worth over $100M
Structured co-investment opportunities for institutional investors
Typical job title: "Co-investment Analysts"
Also try searching for:
Where to Find Co-investment Analysts
Professional Networks
Industry Organizations
Example Interview Questions
Senior Level Questions
Q: How do you evaluate co-investment opportunities and what are the key factors you consider?
Expected Answer: Should discuss deal evaluation process, including analysis of the target company, industry dynamics, growth potential, risk assessment, and alignment with co-investment partners. Should mention importance of timing, terms, and governance rights.
Q: Can you explain how you would structure a co-investment deal?
Expected Answer: Should explain process of negotiating terms with the lead investor, discussing economics (fees and carry), governance rights, and exit alignment. Should mention experience with legal documentation and stakeholder management.
Mid Level Questions
Q: What are the main advantages and disadvantages of co-investments compared to traditional fund investments?
Expected Answer: Should discuss benefits like reduced fees, deal selectivity, and direct ownership, as well as challenges like faster decision-making requirements, potential resource constraints, and concentration risk.
Q: How do you conduct due diligence for a co-investment opportunity?
Expected Answer: Should explain the process of reviewing financial statements, market analysis, competitive positioning, and management team assessment, while also leveraging the lead investor's due diligence.
Junior Level Questions
Q: What is co-investment and why do investors pursue these opportunities?
Expected Answer: Should explain the basic concept of investing alongside a private equity firm, understanding of fee advantages, and the benefit of having more control over investment decisions.
Q: What types of analysis would you perform to support a co-investment decision?
Expected Answer: Should demonstrate understanding of basic financial analysis, market research, and how to review investment memorandums and due diligence materials provided by the lead investor.
Experience Level Indicators
Junior (0-2 years)
- Basic financial modeling and analysis
- Understanding of private equity concepts
- Deal documentation review
- Investment memo preparation
Mid (2-5 years)
- Due diligence management
- Deal execution support
- Investment analysis and valuation
- Stakeholder communication
Senior (5+ years)
- Deal sourcing and evaluation
- Investment committee presentations
- Negotiation of deal terms
- Portfolio management
Red Flags to Watch For
- No understanding of basic private equity concepts
- Lack of financial analysis skills
- No experience with due diligence processes
- Poor understanding of deal documentation
- Limited knowledge of investment structures
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