Co-investments of sovereign wealth funds in private equity

Joseph Mc Cahery; Alexander  de Roode

Co-investments of sovereign wealth funds in private equity

Research output: Working paper › Discussion paper › Other 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 language	English
Number of pages	56
Publication status	Published - Dec 2016

Publication series

Name	TILEC Discussion Paper Series
Volume	2016-035

Keywords

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

Cite this

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title = "Co-investments of sovereign wealth funds in private equity",

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.",

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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.

KW - sovereign wealth funds

KW - private equity

KW - venture capital deals

KW - financial markets

KW - direct investments

M3 - Discussion paper

T3 - TILEC Discussion Paper Series

BT - Co-investments of sovereign wealth funds in private equity

ER -

Co-investments of sovereign wealth funds in private equity

Abstract

Publication series

Keywords

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