PE Associate - Co-Invest

I don't think so. But wait for more responses before making any conclusions...

Co-invest in PE is supposed to be long term. But (pre-MBA) PE associate is usually a "two years and out" program. I don't know how someone who is expected to leave after two years can get to do co-invest.

I would guess it is not typical. At my firm and many of my firms where I have friends, it tends to only be available to more senior level guys. I think it tends to be a nuisance from a documentation standpoint to have a bunch of very small investors in deals with many millions of equity so it just is not that prevalent. I think firms typically use it at the associate level to attract talent because a kid has an offer some place else and it is another perk or they are offering less cash but offering the opportunity to co-invest to make up for it.

Many top MM and MFs allow associates to co-invest. Know some even let you leveraging co-invest at very low interest rates.

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Pre-MBA Associates at my firm co-invest, and there is some borrowing against end of year bonus to temporarily finance. I have heard some funds do co-invest on a deal-by-deal basis, but we basically pick a number for the year, and any deal we do gets that amount.

When you leave, you keep what you have until the investment is realized, but once you're no longer part of the fund, you could get diluted if additional equity is required for follow-ons / other reasons.

Do firms typically offer either co-invest or carry as compensation or do they offer both? How would you evaluate each option?

We allow our youngins to co-invest. We don't manage outside money, it is all our own capital, so every additional dollar of equity we can find we'll use. We remind them on every deal that it may be 14 years before they get their principal back - once reminded of this they usually cut the amount they're willing to invest by 50%.