Private Equity Co-Investment Programme — Direct Deals

PE Co-Investment Programme: Direct Access to Buyout Deals Without Fund Fees

The most sophisticated institutional investors — sovereign wealth funds, top-tier pension funds, large family offices — have long understood that private equity fund commitments carry an inherent inefficiency: the management fee and carried interest paid to the GP over a 10-year fund life materially erode net returns. The largest institutional allocators negotiated their way around this by securing co-investment rights — the ability to invest directly alongside the GP in individual deals, at zero or reduced fees, as a reward for their large primary fund commitments.

This programme brings that institutional co-investment structure to qualified individual and family office investors — offering direct participation in individual buyout transactions alongside established PE sponsors, with named companies and specific terms disclosed upfront.

What Makes Co-Investment Different from Funds

No blind-pool risk: In a primary PE fund commitment, the investor has no knowledge of which companies the GP will buy. They commit capital and trust the manager's judgement over the following three to five years. In a co-investment, the specific company is already identified — the investor receives the information memorandum, management presentation, and deal documentation for the named business before deciding whether to participate.

Reduced fee load: Primary PE funds typically charge 1.5–2.0% annual management fee plus 20% carried interest on profits. Co-investments are offered at materially lower economics — typically 0–0.5% management fee and 10% carry, or in some cases zero fees and zero carry on the co-investment tranche. Over a five-to-seven-year holding period, this fee saving is compounding — it translates directly into higher net returns for co-investors.

Concentration and selectivity: Rather than accepting the GP's entire portfolio of 10–15 companies, the co-investor can choose which specific deals to participate in — investing only in the businesses that most align with their own conviction and sector knowledge.

Speed and simplicity: Co-investments are structured as simple direct equity stakes in a special purpose vehicle owning shares in the portfolio company. There is no complex fund structure with multiple share classes, waterfall calculations, and capital call provisions — the investment mechanics are straightforward.

Deal Sourcing

The programme accesses co-investment opportunities through Global Investments' relationships with established PE sponsors who offer co-investment access as part of their broader investor relations programme. These sponsors are typically mid-market PE firms with track records of 10+ years and multiple successful fund vintages.

Deal types available through the programme:

Control buyouts: Co-investment alongside the PE sponsor in a control buyout of an established business. The co-investor holds a direct equity stake in the same SPV as the PE fund, participating in all of the value creation and exit proceeds.

Growth equity: Minority co-investments in high-growth businesses alongside PE or growth equity sponsors. Higher growth potential but without the leverage and operational improvement dynamics of a control buyout.

Add-on acquisitions: Co-investing in the acquisition of a bolt-on company by an existing PE portfolio company. These tend to be smaller transactions with high conviction from the sponsor (they already own the platform and understand the target's market).

Example Transaction Structure

To illustrate (not a live transaction): A PE sponsor acquires a healthcare services business for £200 million — £60 million of equity from the PE fund and £140 million of leveraged debt. The sponsor offers £20 million of co-investment participation to its investor network at the same terms, so total equity in the deal is £80 million. A co-investor participating at £1 million acquires approximately 1.25% of the equity in the transaction, participating proportionally in all future value creation and exit proceeds.

If the business is sold five years later at £350 million — after repaying the leveraged debt — the total equity proceeds are approximately £210 million. The co-investor's £1 million has grown to approximately £2.6 million, representing a 2.6× money multiple and approximately 21% IRR before the co-investor's reduced carry cost.

Risk Considerations

Concentration risk: Unlike a diversified PE fund, each co-investment is a single company bet. If one company in the programme fails, the loss is 100% of that specific co-investment allocation. Investors should participate across multiple co-investments over time to diversify.

Information asymmetry: Despite receiving substantial pre-investment documentation, the investor necessarily has less information and deal context than the PE sponsor who has run a full due diligence process. Co-investors rely heavily on the quality of the lead sponsor's underwriting.

Leverage risk: Most control buyouts involve leveraged debt. If the portfolio company underperforms, debt covenants may be breached and equity value can be wiped out — the co-investor would lose their entire investment.

Illiquidity: Each co-investment is a direct equity stake in a private company with no secondary market. The holding period is typically four to seven years, dictated by the PE sponsor's exit timeline. The investor has no independent right to exit.

Sponsor dependency: The success of each co-investment depends on the PE sponsor's management of the business and their effectiveness in achieving an exit at an attractive valuation. If the sponsor relationship deteriorates (key person departure, fund underperformance, loss of lending relationships), deal quality and exit execution may suffer.

Suitability

This programme suits sophisticated investors who have experience with private equity as an asset class, understand the risks of leveraged buyouts, and have sufficient capital to make multiple co-investments over time to achieve deal diversification. It is not appropriate for investors new to private equity or as a first alternative investment. Minimum investment per deal is £500,000, and the programme typically requires a commitment to multiple co-investments to achieve adequate diversification.

How to Access the Programme

Contact our investment team to discuss joining the co-investment programme. We will discuss your investment experience, portfolio context, and the sectors and deal types most aligned with your expertise and risk appetite. We will then notify you of relevant deal opportunities as they arise, providing full deal documentation and management access for pre-investment diligence. Minimum investment £500,000 per co-investment.

Important: Capital is at risk. Past performance is not a guarantee of future returns. This is for information purposes only and does not constitute a personal recommendation. Seek independent financial advice before investing. This programme illustrates the type of co-investment opportunity Global Investments advises on — it is not a live investment offer.