The Use of Direct Investments and Co‑Investments to Lure Non‑U.S. Institutional Investors

Fundraising remains competitive and ongoing, despite the record amount of dry powder sitting in the coffers of PE sponsors. To overcome that issue, U.S. PE sponsors are looking to other sources of potential capital – namely, non‑U.S. institutional investors (e.g., sovereign wealth funds) – as prospective investors. Those investors’ allure is accompanied, however, by certain tax and fund-structuring complexities, as well as their persistent demand for no-fee and no-carry co‑investment opportunities. A recent Morgan Lewis webinar featuring partners Ayman A. Khaleq, Gregg S. Buksbaum and Aaron D. Suh delved at length into those topics, along with ways fund managers can proceed. This article contains relevant takeaways from that conversation. See “Latest Market Standards of Economic and Liquidity Terms in LPAs Amid the Recent PE Fundraising Boom (Part Two of Two)” (Feb. 1, 2022); and “Emerging Trends in PE Fundraising, Cash Management and Affiliate Services” (Sep. 14, 2021).

To read the full article

Continue reading your article with a PELR subscription.