Bruce K. Fenton Quoted in The Deal Article, 'Behind the Push Toward Co-investing'
Bruce K. Fenton, chair of Pepper Hamilton's Private Equity Practice Group and Investment Funds Industry Group, was quoted in the December 4, 2015 The Deal article, "Behind the Push Toward Co-investing."
"Most of these investments are done with existing LPs," Bruce Fenton, partner in the private equity practice group at Pepper Hamilton, said in a recent interview.
"It's simply a matter of the PE sponsor being able to say, 'We're giving you an opportunity to invest alongside of us.'
"They're saying, in effect, that we're not just collecting capital from our LPs," he added. "Instead, they're saying 'We want you as an active investor, not a passive partner.'"
To be sure, co-investments aren't a replacement for club deals. Co-investment amounts tend to be significantly smaller capital commitments than the old club-deal structure. The overwhelming majority of co-investment opportunities, as described by Pepper Hamilton's Fenton, are what are referred to as "tag-along" deals in which the limited partner is a minority investor in the transaction.
"In a co-investment context you can genuinely network in a way that allows you to get to know your limited partners in the context of an actual deal," said Pepper Hamilton's Fenton. As the firm's recent report concluded, "The PE industry must continue to look for creative ways to raise funds and generate returns." And it described co-investments as "one method of providing this opportunity."
Content contributed by attorneys of Troutman Sanders LLP and Pepper Hamilton LLP prior to April 1, 2020, is included here, together with content contributed by attorneys of Troutman Pepper (the combined entity) after the merger date.