Co-Investments Enable Hedge Fund Managers to Pursue Illiquid Opportunities While Avoiding Style Drift (Part One of Three)

A co-investment offers an investor in a private fund or another investor the opportunity to participate in an investment to the extent that the fund (via its manager) elects not to pursue the entire investment. Historically, co-investments have been the province of private equity funds, managers and investors. However, as the range of hedge fund investment strategies has grown to incorporate less liquid approaches, the relevance and use of co-investments has grown as well. In this article, the first in a three-part series, SRZ partners Stephanie R. Breslow and Jason S. Kaplan talk to The Hedge Fund Law Report about why hedge fund managers offer co-investments, reasons why investors may be interested in co-investments and the “market” for how co-investments are handled during the negotiation of initial fund investments, among other topics.

Click here to read the second part of this series.

Click here to read the third part of this series.