Currently interviewing for a role focused on fund investing and co-investments and trying to see if anyone has any additional information on co-investing they can share? What does the day-to-day work look like - is it nearly solely focused on performing diligence and reviewing sponsor/3rd party diligence materials (financials, commercial assessment, etc.)?
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hey im interviewing for something similar can share notes
Nice. Really trying to figure out if co-invest is just validating/sense-checking the sponsor's findings, in which case I don't think it would be too interesting of a role.
Coinvesting in most cases is doing a sense-check on what the sponsor is telling you. There is a whole spectrum of what this can look like, from a process that lasts just a few days and doesn't go much further than a data room provided by the GP and is a post-signing (but not necessarily post-close) syndication) to a process where you're underwriting a deal more or less in real time as the GP does their underwriting. You'll likely do some GLG calls to learn about the industry yourself and develop your own view on the deal but you aren't going to do a huge amount of original work (i.e. you won't hire your own consultants, maybe you'll be invited to a management meeting but you probably won't go onsite, you won't do your own customer calls).
Sounds lovely
How rewarding/fulfilling is that work, actually, then? I can't imagine sense-checking would make a very satisfactory career after doing it for several years on end. Have also heard that most LPs are not passing up coinvest opportunities in order to maintain relationships with GPs, so seems that this is more so sense-checking with a confirmatory bias.
It depends on what kind of organization you work for. If you're at an E&F or in a similar allocator seat where primarily you're doing manager selection, you're probably correct that you'll likely look kindly on any co-invest opportunities you're getting from GPs that are already in your portfolio. After all, you invested with them already and the deal is going to be in your portfolio no matter what. In most cases, this is doing coinvestment in order to reduce fees (getting fee/carry free additional exposure to what you're already paying 2/20 on).
On the other hand, there are plenty of firms out there that do coinvestments as the primary piece of their business and they will be very choosy about what deals they do. They're charging 1/10 or something similar to their underlying clients so they are solving for alpha as much as possible. The firm may not even be an LP of the GP who is doing the deal. The GP may be showing the deal to the LP because they need a big equity check and they'd rather have a coinvestment firm write the check and be friendly, silent money in the cap table than do a club deal with another sponsor who will have opinions, want a board seat, try to get involved in value creation, etc. People who stay in this type of co-investment role long term are generally deal junkies who just love transacting and you can get an incredibly number of deals done over the course of a year if all you do is diligence.
What level are you interviewing for?
Associate
Are you currently in IB
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