Houlihan Lokey: Co-Investment's Role in Private Equity

In an article featured in Private Equity International, Matt Swain, who serves as Managing Director and Head of Direct Placements and Secondaries at Houlihan Lokey, delves into the concept of co-investment in private equity. Swain articulates how co-investments can liberate private equity investments from traditional constraints, providing both flexibility and shared benefits between private equity firms and investors. The article examines the advantages of co-investment, such as aligning interests between general partners (GPs) and limited partners (LPs), enhancing deal flow, and accessing larger opportunities that might otherwise be too capital-intensive for a single entity. Furthermore, Swain highlights the strategic importance of co-investments in the evolving landscape of private equity, where investors increasingly seek transparency and direct involvement in the investment process. As such, co-investments have emerged as a significant pillar in the strategies of forward-thinking private equity firms, offering potential for better returns, risk diversification, and a closer alignment of investment goals.