|
Laxman Pai, Opalesque Asia: The value of private equity co-investments involving sovereign wealth funds (SWFs), pension managers, corporate investors, and family offices increased nearly 39% year over year in the first quarter to $42.3 billion, said a study.
Sovereign wealth funds are taking the lead in co-investment activity as the slowdown in private equity fundraising and hurdles to dealmaking prompt both limited partners and fund managers to team up on more co-investment opportunities.
According to an S&P Global Market Intelligence analysis of recent co-investment activity by those four main private equity limited partner (LP) groups, co-investments involving private equity or venture capital firms partnering with SWFs are increasing, accounting for more than 47% of co-investment deal value among those four LP groups since 2021, up from 31% in the 2018-2020 period.
Typically offering lower fees and a more controlled risk-return profile than primary fund investments, co-investment deals may be especially appealing to LPs at a time when slower economic growth threatens to blunt private equity returns. For fund managers, known as general partners (GPs), co-investments can unlock capital for deals when fundraising is slow and financing is tight.
The study revealed that during 2022, the median value of a co-investment with an SWF increased 23% year over year to $185 million. Pension funds went the other direction, with the median value of their co-investment...................... To view our full article Click here
|
RSS
