For those that are involved in allocating co-invest to your LPs, how do you go about doing it? Pro-rata based on fund commitment seems fair but then there are issues like who moved faster, was more helpful, could be more strategic.
I can see there is art to the allocation but don’t want to spend too much time handling unhappy LPs either.
Interested as well
I allocate to whoever will pay me the most in syndication fees. Not even joking.
I think you will have many silver bananas coming your way.
What about if the LPs were all equal in paying syndication fees?
Combo of whoever is the easiest to deal with, comes first, and has no execution risk.
1) Who made a big deal about coinvest when they committed to Fund N (keep them in for Fund N+1) - roughly pro rata among current LPs based on coinvest interest
2) Who do we think this will help convince to commit to the next fund
3) Who else is willing to write a check to get us to the level of equity we need (rarely gets to this stage)
This is pretty much on the mark
Syndication fees are unusual outside of really capacity constrained VC/growth deals. Aggravating LPs by trying to charge them on co-invest is a pretty short term strategy
Not if your deals are really good and limited in supply.
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