What’s life like at co investment funds?
Just looking to see what is different about the job at co investment funds compared to I guess “regular” investing funds? Not sure the terminology. Are hours better? Type of modeling different? All the same just different mandate?
Would think of co-investing as "PE light" - you're partnering alongside a GP that is doing the grunt work (modelling, customer invoice analysis, commissioning 3rd party reports, etc.) and typically receiving near-finished / finished work product so the diligence you do is really stress-testing the GP's underlying model assumptions and making sure their work and the deal's risk/return profile pass the sniff test.
Timelines tend to be shorter, deal velocity is much higher, and the work is slightly less interesting esp. given limited mgmt. team interaction. The trade off is that hours are typically much better (e.g., rare to have weekend work) and you're not dealing with a lot of the BS that comes with the GP side (portco fire drills, combing through insurance reports, doing detailed VDR reviews/summaries). Hours will vary widely though, especially if you're on a team that does both Funds and Co-investments.
I would say it really depends on what you are looking for. If you like more hands on operations + post-investment value creation (doing add-ons, accounting work with CFO etc) then direct investing is definitely great for that. Co-investing is really for deal junkies and people who are intellectually curious and want to learn about all the best companies in various different sectors. You get to see how the best (and worst) GPs run their programs, create value, and run DD, and you really just get a ton of deal reps and pattern recognition in actually closing deals.
I see co-investments as almost a hybrid between direct PE and a hedge fund. You get all the returns benefits of the PE asset class without needing to spend half a year chasing a deal and running detailed workstreams only to have the deal die.
Thank you!
Why do people focus so much on interactions with management? From my experience I have not been impressed so far… they do what they need to do to collect pay checks just like you and I. Unless if you are in VC/growth maybe you interact more with founders/entrepreneurs I guess
I don’t think he’s referring to the “prestige” factor of telling your friends you met with some CEO or putting on LinkedIn that you’re a board member and is instead referring to the applicable experience of interfacing and working alongside c-suite executives, as well as just hearing how they think about executing certain larger strategic initiatives. As a co-investor, you may meet with them over Zoom during a diligence session pre-close and then the only other time you’ll maybe speak with them is at an annual meeting. Some direct firms take a different approach to this, but at our firm, associates are thrown a lot of portco work and some are even placed in chief of staff roles at companies after two years.
Yes that’s what I meant and I am curious if others really learn a lot from these “working with c-suits”. For context I work at a mid market buyout shop. My experience is that the management basically has to do what we tell them to so I never really see the thrill of seeing them execute the strategic thinking…
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