Secure advantageous terms and the right protections when offering and investing in direct and indirect co-investment opportunities.
Deal-specific co-investments are a fast-growing segment of the private equity market. They offer managers access to additional capital and investors the prospect of reduced fees and improved returns. But there is no one-size-fits-all model: each co-investment is heavily customised, throwing up unique challenges and risks for both managers and investors. Managers need to juggle deal financing options, while co-investors have to respond rapidly if opportunities are to be seized.
Our lawyers have deep experience negotiating direct and indirect co-investment arrangements for managers and investors alike. We help investors to secure better protections, from greater transparency to anti-dilution rights to a measure of influence in the underlying portfolio company. We work with managers on the most appropriate structure for the co-investment, its interaction with their primary fund, and the underlying acquisition documents. We take pride in integrating our funds, tax and corporate expertise to develop innovative solutions for participants in the co-investment.
We advise our clients on the whole suite of co-investment documentation, forming entities and structuring the underlying transaction. Depending on whether it is a direct or indirect co-investment, our clients can rely on us to negotiate everything from a bespoke LPA for a dedicated co-investment partnership to a co-investment agreement with the manager’s primary fund to the acquisition documents for the underlying deal.
MJ Hudson has recently authored a guide for investors and GPs: Private Equity Co-Investments, The Manual. This comprehensive guide covers topics from both the LP and GP perspective, including economic terms and structures, legal and tax issues and trends in co-investments. Learn more and download the guide below.
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