Co-Invest
How does co-invest work at MM PE shops (especially at the VP / Principal levels)? I know firms do it differently and the requirements change over time (the more senior you are the more you are expected to co-invest), but curious to hear from the group here.
One way that I've heard is that you have to co-invest pro rata to your allocation of carry (assuming you get carry). So if $1bn fund with let's say 10% GP co-invest stake and you have 1% of the carry pool, would you be required to co-invest $1m ($1bn * 10% * 1%)? So over a 5 year investment period, can assume $200k co-invest each year? Is this math right?
Also, when are people generally obligated to co-invest vs. encouraged? At the VP level?
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