Investors on this desk typically choose between two routes. The first is to co-invest in a single, named opportunity alongside a lead — you see the specific deal, decide on it, and take exposure to just that asset. The second is to commit to a fund as a limited partner (LP): you back a manager and a strategy, your capital is drawn down over time, and the manager selects the underlying deals. Each has a distinct profile.
Co-investment — a single, chosen deal
- You diligence one named asset and decide on it specifically — no blind pool.
- Exposure is concentrated: your return depends on that one deal, for better or worse.
- Fees are usually lighter than a fund — often no, or a reduced, management fee, with carry to the lead.
- You invest deal-by-deal, so you control pace and selection, but you carry concentration risk.
- Commonly structured through a co-investment SPV that holds the single asset (see the SPV guide).
Fund LP — a managed portfolio
- You commit capital to a blind pool and the manager (the GP) selects the deals within a mandate.
- Diversification across many assets reduces single-deal risk, at the cost of choosing each one.
- Fees are typically a management fee on commitments plus carried interest over a hurdle (e.g. 2% and 20% over 8%).
- Capital is drawn down over an investment period and returned over the fund's life — a long, illiquid commitment.
- Governance is via the LP agreement and an advisory committee, not deal-by-deal control.
How to choose
If you have the capacity to diligence individual deals, want to choose your exposures, and are comfortable with concentration, co-investment lets you be selective and keep fees low. If you would rather delegate selection, want diversification across a portfolio, and value a manager's origination and oversight, a fund LP commitment fits better. Many investors do both — anchoring in a fund for diversified exposure and co-investing selectively in deals they have conviction in.
This is general information, not advice or an offer. The specific economics, fees, drawdown terms and rights differ in every vehicle and are set out only in the definitive documents. Obtain your own legal, tax and financial advice before committing.
The documents
A co-investment is typically papered with a co-investment term sheet (headline terms of the slice you are offered) followed by an SPV subscription. A fund commitment is papered with a subscription into the fund and the LP agreement. The co-investment term sheet and SPV subscription summary are available as fillable templates here.