The ten plus years fund is not the only means for private equity and venture fund managers to deploy funds into private companies. It is increasingly common to see a variety of investment strategies used, including through the fast-growing area of direct co-investments.
Co-investment is where a GP arranges a separate investment into a target company typically, for a small number of existing LPs or new investors. The main fund may be an investor in the portfolio company or the co-investment could be entirely separate.
Sometimes a group of LPs look to increase their exposure into an individual portfolio company or provide liquidity when the main fund cannot invest more. Co-investment is popular with investors who want to make direct PE and VC investments but establishing and operating independent structures to accommodate the investments can be a burden.
Traditional co-investment structures can be often slow to set up and operating them can be overly cumbersome and expensive. There are other possible complicating matters, such as the delay caused by the need to open bank accounts for these entities, particularly where the deal timescales are short.
Mainspring has developed its Investment Platform for fund managers which is both quick (a week or so) and inexpensive (a fraction of the cost of setting up a formal investment structure). It is also flexible to operate. Mainspring’s Investment Platform has been designed to allow fund managers to bring together investors to make investments swiftly and with a minimal administrative burden.
You can learn more about Mainspring’s Investment Platform here
If you are looking for a complementary, flexible and low-cost co-investment structuring option, the Mainspring Investment Platform offers a solution.