Negotiating Co‑Investments: Unique Features and Considerations in Co‑Investment Vehicle Documents (Part Two of Two)

When a PE sponsor chooses to offer a co‑investment program, negotiations of the fund documents for the co‑investment vehicle are typically not contentious because they are usually based on the main PE fund’s documents. It remains valuable, nonetheless, for the GP to be aware of current market standards as to certain bespoke provisions LPs expect to see in the limited partnership agreement (LPA) and side letters for its co‑investment vehicle. This second article in a two-part series discusses documenting the co‑investment vehicle, including fees, expenses and LP rights typically set out in the fund agreement and what items are usually included in co‑investor side letters. The first article addressed co‑investment-related provisions in a main PE fund’s LPA and side letters, including several that can provide flexibility to GPs in the timing and allocation of co‑investment opportunities. See our two-part series on co‑investments: “Structures That Give GPs More Control and Discretion” (Apr. 21, 2020); and “Direct and Indirect Structures That Empower LPs” (Apr. 28, 2020).

To read the full article

Continue reading your article with a PELR subscription.