Private equity and venture funds tend to be operated by commercially driven individuals who select investments only after undertaking significant due diligence and strategic analysis. The traditional means of providing these individuals with an incentive, which is also designed to align their interests with investors in the main fund, has been through the use of carried interest. This has typically been structured through a carried interest partnership. Increasingly managers are offering executives and staff the additional benefit of directly co-investing alongside the fund or (independently of the fund if the fund cannot invest) with other investors.
Setting up formal co-investment vehicles is possible but is costly and time-consuming and there is an ongoing administrative burden associated with a new vehicle, which may be outweighed by the quantum of investment available.
Mainspring has developed its Investment Platform to give fund managers the ability to allow executives and staff to invest into deals that they have worked on. The fund manager retains full control of the investment while Mainspring takes on the administrative burden.
You can learn more about Mainspring’s Investment Platform here
If you are looking for a complementary, flexible and low-cost fund structuring option, Mainspring has a solution.