In this series we have explored the challenges GPs face today across the full private equity lifecycle – fundraising, deployment and exits. The most adaptive private equity managers are those who are the most creative and strategic in partnering with their limited partners. In the always shifting GP/LP power equation, both are seeking trusted partners with whom they can build a long history of collaboration, transparency, and customization.
Co-investments have become one of the first stops for sponsors and their investors looking to collaborate and deepen their relationship. Increasingly GPs have equity co-investments as a permanent element of their operating model. In a recent Dechert survey of 100 private equity firms, 73% now offer a co-investment program.
It is a clear win-win. GPs can customize the deployment and portfolio construction of their funds -- particularly crucial in a limited exit world – juggling concentration risk and extending the deployment of their existing vintage. Likewise, LPs get access to advantaged deal flow in a highly cost-effective structure with the potential for outperformance...
“People think there’s going to be this kind of nirvana where the Fed is cutting interest rates and the economy…is growing. There are real risks out there.” – Lori Van Dusen, chief executive, LVW Advisors.
Featuring Charts
Chart of the Week: To Co-Invest, or Not to Co-Invest
The majority of GPs in Europe and North America offer equity co-investment programs. Source: Dechert’s 2025 Global Private Equity Outlook.(Past performance is no guarantee of future results.)
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Chart of the Week: Bigger Brothers
Since 2020 the share of GPs raising larger funds has been growing. Source: PitchBook(Past performance is no guarantee of future results.)
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Chart of the Week: No Money-Back Guarantee
The absence of realizations has hampered distributions to LPs. Source: Burgiss/MSCI(Past performance is no guarantee of future results.)
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Chart of the Week: Secondaries on the March
The growth of equity secondaries is fueled by both LP and GP liquidity needs. Source: Jefferies(Past performance is no guarantee of future results.)
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Chart of the Week: On Holds
In the absence of M&A activity, PE portfolio companies are held for extended periods. Source: PitchBook(Past performance is no guarantee of future results.)
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Chart of the Week: Who’s The Driest?
Despite claims of a “too crowded” private debt market, PE dry powder is four times greater. Source: Preqin(Past performance is no guarantee of future results.)
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The Pulse of Private Equity – 12/9/2024
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PDI Picks – 12/9/2024
Private debt popularity keeps growing Fundraising has been challenging over the last couple of years, but LPs now have the inclination and the ability to commit more capital. If you’ve been wondering whether private debt can keep its growth momentum going, there’s plenty of room for optimism to be found in our latest LP Perspectives…
Private Debt Intelligence – 12/2/2024
Management fee rates vary by private debt strategy Read more in Preqin’s ‘Strategy in Focus: Challenges to Income Generation’ Interest rate cuts across major economies have slowed the growth of private debt, with GPs combatting fundraising headwinds by making concessions on fees and terms to secure capital…. Subscribe to Read MoreAlready a member? Log in
Middle Market & Private Credit – 12/2/2024
Business Development Companies Outlook 2025 Click here to download report. Join Fitch for the upcoming Outlook panel: Private Corporate Credit, What to Expect in 2025. What to Watch The impact of heightened competition on middle-market deal terms and structures…. Subscribe to Read MoreAlready a member? Log in here...
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