Co-Investing Strategy

Co-Investments are investments made directly into a portfolio company, alongside a private equity fund.

Co-investments represent an opportunity for Kensington to enhance the overall returns in its funds of funds portfolios by capitalizing on strong direct investment opportunities without materially increasing portfolio risk. Many private equity fund managers bring co investment opportunities to their limited partners where a desired portfolio investment requires more capital than they have available, or than they wish to allocate to one company. Co-investments are also made available to Kensington funds when the Kensington team identifies a private equity investment opportunity and selects a fund manager with which to co-invest. The Kensington team is well known as a pro-active co investor, initiating new direct investment transactions for its portfolio funds, and teaming with these funds on the execution and management of the resulting co-investment. In this way, Kensington adds tangible value to its portfolio funds beyond the mere provision of capital.

Co-investments generally pay no profit share, so fund investors use co investment to lower their overall cost of investment, resulting in a higher net potential return. Co investing may also help put the fund’s capital to work in a shorter time frame, mitigating the J curve effect and thereby enhancing portfolio returns.

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