Lost in all the excitement in the PE industry about co‑investments is the fact that those investments entail real risks for both sponsors and investors. For sponsors, missteps when selecting and interacting with co‑investors can inadvertently trigger certain registration or filing requirements. Co‑investors, on the other hand, can face substantial tax ramifications depending on the vehicle and structure of the co‑investment. To help PE sponsors and investors navigate these and other issues, Strafford CLE Webinars recently hosted a program that was presented by Sadis & Goldberg partners Steven Huttler, Daniel G. Viola and Alex Gelinas. This second article in a two-part series details certain regulatory ramifications for PE sponsors to weigh, as well as tax optimization tips for investors pursuing co‑investments. The first article analyzed the different types of investment vehicles typically used in co‑investments, as well as common issues that arise when negotiating co‑investment terms. For additional commentary from Sadis & Goldberg attorneys, see: “Into the Weeds on the Promise and Perils of Cannabis M&A” (May 21, 2019); and “How Investment Managers Can Advertise Sub-Adviser Performance Without Violating SEC Rules” (Dec. 1, 2016).