Co-investments of sovereign wealth funds in private equity

Joseph Mc Cahery, Alexander de Roode

Research output: Working paperDiscussion paperOther research output

Abstract

Direct investments are the preferred vehicle for large institutional investors to have control over their portfolio investments. We study the deal structure of direct investments by sovereign wealth funds (SWFs) in private equity transactions. We find that SWFs shift from investing in private equity funds to originating and co-investing together with private equity funds in deals. The choice for co-investment affects deal size, risk-bearing, fees and returns. Overall, our results show the strong interest of SWFs in direct investments in developed markets.
Original languageEnglish
Number of pages56
Publication statusPublished - Dec 2016

Publication series

NameTILEC Discussion Paper
Volume2016-035

Fingerprint

Private equity
Direct investment
Sovereign wealth funds
Investing
Institutional investors
Portfolio investment
Fees

Keywords

  • sovereign wealth funds
  • private equity
  • venture capital deals
  • financial markets
  • direct investments

Cite this

Mc Cahery, J., & de Roode, A. (2016). Co-investments of sovereign wealth funds in private equity. (TILEC Discussion Paper; Vol. 2016-035).
Mc Cahery, Joseph ; de Roode, Alexander . / Co-investments of sovereign wealth funds in private equity. 2016. (TILEC Discussion Paper).
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Mc Cahery, J & de Roode, A 2016 'Co-investments of sovereign wealth funds in private equity' TILEC Discussion Paper, vol. 2016-035.

Co-investments of sovereign wealth funds in private equity. / Mc Cahery, Joseph; de Roode, Alexander .

2016. (TILEC Discussion Paper; Vol. 2016-035).

Research output: Working paperDiscussion paperOther research output

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AB - Direct investments are the preferred vehicle for large institutional investors to have control over their portfolio investments. We study the deal structure of direct investments by sovereign wealth funds (SWFs) in private equity transactions. We find that SWFs shift from investing in private equity funds to originating and co-investing together with private equity funds in deals. The choice for co-investment affects deal size, risk-bearing, fees and returns. Overall, our results show the strong interest of SWFs in direct investments in developed markets.

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Mc Cahery J, de Roode A. Co-investments of sovereign wealth funds in private equity. 2016 Dec. (TILEC Discussion Paper).