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Fund managers have become more flexible when it comes to co-investments, but that doesn't mean it's a free for all. Delegates at the recent Opalesque Co-Investing Roundtable discussed how they structure terms to maintain confidentiality and ensure fair and equitable treatment.

"Given the nature of our type of investing, the most important step to start the process is the signing of a confidentiality agreement with a strict "no-trade" provision," says Jim Mitarotonda, CEO and Chief Investment Officer, of Barington Capital Group. Barington takes activist positions in US-listed equities. "It typically takes us 6-9 months to identify an investment idea and develop a plan to improve a company's financial and share price performance. So, of course, we want to make sure that our work is protected and that no outsider front-runs our investment group. We take this process quite seriously, and have worked with the government in the past to help prosecute a potential investor that violated the terms of our confidentiality agreement."

Firms like Barington are able to generate alpha by building significant positions in companies, but that style of investing also generates its own set of questions beyond frontrunning, like - who gets out first in a co-investment? Kieran Cavanna, CIO at Old Farm Partners, a hedge fund allocator, says this is where it is important to work with managers where investors have a strong relationship. "I just came from a fund that has a 20% po......................

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