Why Work for Co-Invest Fund?

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I have an interview coming up with a co-investment fund. What is the best way to answer the "why do you want to work for us" question?

I was thinking about saying something along the lines of co-investment model gives associates the chance to really learn about a company, build detailed financial models, etc. while piggybacking off the main Sponsors work. Don't necessarily have to do all the diligence yourself (which can take a painstaking amount of time).

Thoughts / comments?

Comments (9)

 
Jul 13, 2016 - 8:53am

Some others: deals will be hand-picked and shown to you so less emphasis on sourcing and more on investment work, not paying or paying reduced fees/carry vs. traditional FoF investing.

 
Jul 25, 2016 - 9:03pm

I don't know many places that are dedicated, standalone co-invest shops but most (all?) of the big FoFs will have a dedicated co-invest vehicle. Relationships via primary fund commitments help to drive the CI opportunities: show your big anchor LP FoF a few deals you cherry picked as winners and they'll be very happy with you the next time fundraising roles around.

Other reasons could be 1) say you're a shop that writes an average equity check of 25-35mm and the next time you fundraise you want to raise a materially larger fund, such that given the same amount of deals, you want to target 45-65mm equity checks. If you source those deals that size now and write your standard 25-35mm check and allocate the rest to co-investors, you're building a track record of larger deals without going outside of your current fund parameters and pissing off your LPs.

2) Similarly for portfolio construction purposes, if you fund a really good deal but that much equity invested as a % of capital deployed overweights your exposure to one sector, you might commit less fund equity and allocate the rest to co-investors.

The more I think about it the more working for a CI fund sounds like pretty sweet gig. Obviously though there are downsides.

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