One question every private-market investor should ask: how much is the sponsor investing, too? Sponsor co-investment can help you understand how the sponsor’s interests may line up with yours, but it’s only one part of due diligence. Before making a commitment, confirm your eligibility, understand the deal’s legal structure and review the risks.
Key points
- Ask how much of the sponsor’s own money is in the deal.
- Sponsor co-investment can signal how interests may align.
- It’s only one part of due diligence: also check eligibility, structure and risks.
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