The Art of a Successful Co-Investment: What UBS Says

TL;DR: UBS Global's write-up of a PEI roundtable says co-investment has become a core portfolio construction tool. Its panelists argue deal access isn't enough, and name speed, dedicated underwriting and an independent investment view as the differentiators. If you're offered a co-investment, those three are what to test.

What did UBS report about co-investment?

UBS reports that participants in PEI's annual co-investing roundtable agreed that co-investment "has evolved into a core portfolio construction tool." Investors use it to shape exposure across sectors, geographies and vintages, and to deepen relationships with general partners (GPs). If you want the mechanics first, our co-investment LP economics guide walks through them.

The timing matters. The same write-up ties the trend to market volatility, slower fundraising and a prolonged exit slowdown. In that setting, panelists said co-investment helps limited partners (LPs) deploy capital more selectively.

The source is UBS summarizing a panel. That's all. It isn't a dataset, and it doesn't report returns, so treat it as how experienced allocators describe their own practice and not as evidence of what co-investments earn.

Why isn't access to deals enough?

Because access is the easy part to copy. UBS says successful programs require far more than deal flow, and it names speed of execution, dedicated underwriting expertise and the ability to form an independent view as the critical differentiators.

The independent view is the one that applies most directly to you. If your only reason to say yes is that the sponsor asked, you're underwriting the sponsor's pitch, not the deal.

So borrow the habit. Read the documents, ask what the sponsor's own check is, and decide before the deadline pressure arrives. A short window is hardest on the person who hasn't started.

What does a co-investment cost and what can go wrong?

The common pitch is lower cost. The World Economic Forum describes co-investing as a model in which smaller investors collaborate with larger partners, avoiding fees. The American Bar Association adds a caution: co-investors should consider fees and related-party transactions, as they may bear indirect fees charged by the PE fund or its affiliates for managing the investment vehicle.

So "no fee, no carry" is a claim to check in the documents, not a fact to assume. The UBS panel also listed the problems it sees: concentration risk, governance complexity, evolving allocation practices and the emergence of evergreen vehicles.

Question to ask	What the sources say	What it means for you
Is the economics really fee-free?	WEF describes fee avoidance. The ABA says indirect fees may still apply.	Get the fee terms in writing, including affiliate charges.
Can the sponsor underwrite quickly?	UBS names speed of execution as a differentiator.	Ask how long you'll have, and what the sponsor has already done.
Who has an independent view?	UBS names an independent investment view as critical.	Decide what you'd conclude if the sponsor weren't presenting.
How concentrated is the bet?	UBS lists concentration risk.	One deal is one company. Size it like a single position.

None of that is a reason to avoid co-investment. Treat each deal as its own decision, and run those four questions on it.

What about joining a deal mid-hold?

PitchBook reported this week that longer holds are squeezing GP liquidity, so some GPs are selling minority stakes in existing portfolio assets. These are mid-life co-investment deals. PitchBook cites its Q3 2026 European PE Breakdown, which counts a record 14,803 PE-backed companies in Europe, with 11% held for more than nine years. For the fundraising side of the same pressure, see the co-investment squeeze.

PitchBook's framing is a trade-off. Co-investors who join mid-hold skip what is often the riskiest stretch, but they can also come in at a higher multiple than the sponsor paid, which can affect alignment with the GP. If someone offers you a mid-life deal, ask two things. What was the sponsor's entry price? And are you paying more for the same asset?

Common mistakes

The first mistake is assuming a co-investment is cheaper without reading the documents. The ABA's point about indirect fees is the reason to check.

The second is saying yes because the sponsor is well known. A good GP can still bring you a deal that is priced richly or concentrated in one company.

The third is skipping the entry price. On a mid-life deal, PitchBook says co-investors can pay more than the sponsor did, and that can change who benefits when the asset sells.

FAQ

What is co-investment in private equity?

It's a joint investment by two or more investors, usually a PE sponsor and one or more LPs, in a single portfolio company. According to the American Bar Association, each co-investor participates directly in the equity financing alongside the fund, rather than investing through the fund itself.

What makes a co-investment successful?

The UBS roundtable points to speed of execution, dedicated underwriting expertise and an independent investment view. It also says strong underwriting discipline remains essential, because multiple expansion can no longer be relied on to drive returns.

What is the dark side of co-investing?

The UBS panel listed concentration risk and governance complexity. The ABA notes that co-investors may bear indirect fees. PitchBook says mid-life co-investors can pay a higher multiple than the sponsor did.

Can individual investors co-invest?

Only if a sponsor offers it to you. The sources here describe co-investment among LPs and sponsors, so an individual should expect to see it, if at all, through a syndicate or feeder. Ask which structure applies, and check accredited investor versus qualified purchaser eligibility first.

What to do next

Before your next private equity conversation, write down three answers: what the sponsor's entry price was, what fees sit above your investment including affiliate charges, and what you'd conclude without the sponsor's deck. Then subscribe to the free AIN briefing, and we'll send you the next deal read the same way.

Educational content only. Not investment, tax, or legal advice. Not an offer or solicitation to buy or sell securities. Past performance does not guarantee future results. Private-market investments are illiquid and involve risk of loss, including total loss of capital. Consult qualified advisers. Angel Investors Network is not a broker-dealer or investment adviser.