© Reuters. “Co-investment” offers added value in private equity, Schroders explains how
Richard Damming, Senior Investment Director, highlights the opportunities offered by leading European SMEs in niche sectors and illustrates three cases in which Schroders (LON:) has successfully invested: Mintec, Easypark and Headfirst
Private equity is increasingly attractive to investors looking to diversify. Well known to many institutional investors, less so to individual ones, it requires an understanding of some key risks, such as illiquidity, but also a specialist knowledge of market paths, because it usually focuses on funds generally focused on particular segments. Another way to invest in private equity it is a co-investment strategy, which can help you access more opportunities at a lower price than a fund.
GREATER DIVERSIFICATION AND SELECTIVITY
Richard Damming, Senior Investment Director at Schroders, explains that co-investments offer limited partners, such as pension funds or asset managers, the opportunity to invest directly in companies together with general partners, such as private equity firms. This can offer greater diversification across managers, sectors, strategies and geographies as well as a greater degree of selectivity. Co-investment also offers the opportunity for more active engagement with companies, for example on sustainable practices and behaviours. In times of crisis, Damming points out, co-investments offer lower and more attractive entry valuations…
** This article was written by FinanciaLounge