Structuring Private Equity Co-Investments and Club Deals: Risks and Opportunities for Sponsors and Investors
Course Details
- smart_display Format
On-Demand
- signal_cellular_alt Difficulty Level
Intermediate
- work Practice Area
Banking and Finance
- event Date
Tuesday, January 16, 2024
- schedule Time
1:00 p.m. ET./10:00 a.m. PT
- timer Program Length
90 minutes
-
This 90-minute webinar is eligible in most states for 1.5 CLE credits.
This CLE program will review legal developments in co-investments for private equity, investment structures, and key deal terms. The panel will provide insights and perspectives into opportunities and risks for both sponsors and investors.
Ms. Schwartz focuses her practice on the structuring, formation and operation of private equity funds, including buyout funds, venture capital funds, mezzanine funds, distressed funds and real estate funds. She represents both fund sponsors and investors in her practice. In addition to assisting fund sponsors with their internal management arrangements, succession planning and the creation of internal investment and co-investment vehicles, she has extensive experience with institutional investors and regularly advises clients on market terms of investment funds. She also advises private equity funds in connection with their investments in, and disposition of, portfolio companies and the establishment of capital call credit lines.
Mr. Marrs is a partner in Willkie’s Chicago office, where he is a member of the Asset Management Department and Private Funds practice. He has over 25 years of fund formation experience and is a recognized leader in the market, with a particular focus on private funds investing in the real estate, infrastructure and energy sectors. His practice is focused on the structuring and formation of private funds, management companies, carried interest arrangements and joint ventures. Mr. Marrs represents a variety of US and international private fund sponsors, investors and other stakeholders across numerous industries.
Co-investment and club structures provide opportunities to address private equity sponsor and LP goals. From the sponsor perspective, a co-investment or club structure can fill a capital need--whether a growth need, acquisition financing, or a rescue need. For more minor sponsors, a co-investment or club structure can create a business opportunity for a sponsor unable to raise sufficient permanent capital.
From an LP or investor standpoint, co-investment opportunities offer the ability to gain additional access to desired investments or opportunities to sit higher in the capital stock of a portfolio company or asset.
The terms of co-investment and club arrangements are typically negotiated on a case-by-case basis depending on factors such as the type and identity of the investor, asset type or portfolio company business, and the intended use of the capital. Key terms include, among others, fees, expenses, anti-dilution, most favored nation, and affiliate transaction provisions.
Notably, counsel must design the co-investment opportunity or club deal to address a variety of often-overlooked, essential regulatory considerations, especially broker-dealer and investment adviser regulation.
Listen as our authoritative panel of practitioners analyzes the opportunities and risks of co-investments and club deals in private equity for both sponsors and investors, how to choose the proper investment structure, how to negotiate key deal terms, and how to navigate the regulatory ramifications of these deals for the investor and the sponsor.
- Co-investment structures
- Deal documents and critical deal terms
- Current trends in private equity co-investments
- Regulatory hurdles: broker-dealer, investment company, investment adviser, and state blue sky regulations
The panel will review these and other key issues:
- What are current developments that impact co-investments and club deal structures, and how have the terms of these arrangements evolved?
- What are typical deal structures for co-investments?
- What regulatory problems most often derail co-investment and club transactions?
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