I see a lot of material around regarding the top secondaries funds, but I was curious who the top players are when it comes to co-investments and primary fund investments.
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Based on the most helpful WSO content, here are some of the top players in co-investments and primary fund investments:
Co-Investments
Co-investments are dominated by large pensions, sovereign wealth funds (SWFs), and family offices. These players often seek to avoid the additional fee layers associated with traditional fund structures. Key names include: - APAC Sovereign Wealth Funds (SWFs): GIC, Temasek, KIC, Mubadala, ADIA. - Canadian Pension Funds: OTPP (Ontario Teachers' Pension Plan), CPPIB (Canada Pension Plan Investment Board), OMERS. These funds have been building strong direct investment teams by hiring senior talent from megafunds. - Family Offices: They are significant players in co-investments due to their flexible mandates and ability to deploy capital alongside core partners or selectively with new partners.
Primary Fund Investments
Primary fund investments are typically the domain of fund-of-funds, large institutional investors, and family offices. These entities focus on committing capital to private equity funds. Notable players include: - Fund-of-Funds: While fund-of-funds generally do not engage in co-investments, they are key players in primary fund investments. Examples include AlpInvest and HarbourVest Partners. - Institutional Investors: CALPERS and NYS Common Fund are prominent examples of institutions actively involved in primary fund investments.
These players are known for their scale, expertise, and ability to navigate complex investment structures, making them leaders in their respective areas.
Top co-invest and primary from a dealflow perspective are naturally going to be pensions, SWFs, and large family offices. If thinking about selecting some names from each category would say practically all of the Canadian pensions are quite active and as well as the Middle East SWFs. GIC and Temasek are two other SWFs which are not Middle East but also busy deploying capital in the US. There are plenty of family offices out there so would be difficult to list out all of them.
Funds that are quite dominant in secondary but do have strong or decent co-invest and primary would be Ardian, Carlyle AlpInvest, HarbourVest, Lexington, and Pantheon. Some of these funds run a three-team strategy and the investment teams are separated so typically are going to end up doing one of the three instead of working across strategies.
At one of the mentioned and it’s comingled, we cover primaries, secondaries, and Co-investments within one team.
This is super helpful, thanks! Is there a material benefit to going to pensions vs. SWF vs. E/F vs. FoF vs. FO? Also, I was curious if people like BX SP, Apollo S3, and StepStone are not really meaningful players for co-invest and primary fund investments? I know it would be tough to list out all the different FOs, but would it be right to think that the top ones would be large SFOs like Vulcan, Elysium, etc., or are the MFOs more attractive like ICONIQ or Bessemer or something.
Comp basically goes like this from least to most pay, pension (public), pension (private), E&F (if large), FoF, FO. This is at the more junior ranks as the MP at a FoF makes millions a year while nobody else in this discussion makes that much outside of maybe CEO/CIO of massive (like Gates) FO or giant E&F. Even then those roles do not have the giant upside of owning a firm, like a MP of a FoF would.
I know nothing about BX/Apollo FoF, I'm not personally aware of them doing anything in that world outside of maybe GP stakes which isn't FoF. StepStone is a very good shop in small buyout and VC/GE, they are just are known to pay less but nobody really seems to leave once they make it to mid-levels. There are also dozens of smaller FoF out there that focus on more interesting/smaller strategies than say a HarbourVest who is just doing the largest funds out there due to their scale.
Personally don't think there is a material benefit in terms of the overarching bucketing that you have mentioned since it really depends on what the underlying team does within each bucket. The strategy of each firm within a bucket can vary vastly so it's hard to give overarching opinions.
BX SP and Apollo S3 are predominantly secondaries investors. They don't do primary or co-invest in the way we are thinking about it. BX SP has GP Stakes now which can do seeding of a new fund but it's not real fund of funds and then co-invest is not in the way we are describing it either. Apollo S3 is a little more broad for mandate as they can do seeding, fund finance, etc. but overall would not consider them primary or co-invest investors for purposes of how we are defining everything.
StepStone is another big fund in the space that can do primary, secondary and co-invest. My list wasn't all encompassing so certainly some missed names, I think Hamilton Lane can be thrown into that mix too.
I don't have too much insight on the FO landscape but all the ones you listed are known funds in the space. I can't really say whether a well known FO is the place to be since it depends on what you are looking for. A no name FO can end up being a very nice gig if you are prioritizing other aspects than pure prestige and whether a finance professional has heard of the fund.
GIC has a great integrated practice, basically invest in every major LP, and runs a lean team out of NYC. Cash comp I hear is decent ( comparable with MMPE, no carry but have some sort of LTIP at senior levels), and WLB is good as they are very efficient.
They are lean though and are very picky about who they advance to / above AVP, which is their version of Sr. Associate - their system is to treat 3rd Year associate as AVP but kick you out typically and then they hire laterals or MBAs, for which there’s maybe 1 spot per year.
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