Private Equity Co-Investments I

Private Equity Co-Investments I

Private Equity Co-Investments I

GLOBAL ACCESS TO MIDDLE MARKET BUYOUT CO-INVESTMENTS

A private equity co-investment refers to a direct investment in an unlisted company together with a private equity fund. In this way, you can benefit in two ways: This approach offers you the higher returns of private equity, as well as manager diversification without the double fees of a fund of funds. 

15%
The regulators (OPA) allow Swiss pension funds to invest up to 15 percent in alternative investments.
< 7%
The potential is evident from the fact that so far, Swiss pension funds have invested less than 7 percent in alternative investments.
1.5%
This is about how low the private equity share of Swiss pension funds is

What is so special about our manager?

  • GCM Grosvenor is an independent specialist for private equity investments with long-standing experience and a focus on the middle market.
  • More than 45 private equity specialists take care of the selection and evaluation of the best deals.
  • The global private equity platform of GCM Grosvenor has capital commitments worth more than USD 29 billion in more than 740 funds. 
  • Since 2003, GCM Grosvenor has made commitments in excess of USD 12.5 billion in more than 168 co-investments with more than 87 different general partners through its co-investment platform.
  • Compelling track record at both the primary fund level as well as in co-investments.
  • GCM Grosvenor takes ESG criteria into consideration in a dual-track investment process by two independent teams.
Fewer details
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Opportunity to achieve higher returns

  • Focus on co-investments (80-100%)
  • More concentrated than a fund-of-funds solution in order to facilitate higher returns
  • Nevertheless, the portfolio remains appropriately  diversified in various dimensions.
  • Goal: 20-30 co-investments (max. 5% exposure per company)
  • At least three vintage years
  • Max. 15% per sponsor
  • Max. 33% per industry
 

Attractive fee structure

  • Fees are only charged on capital invested.
  • The fee layer at primary fund level is largely eliminated.
  • This results in a much lower total expense ratio (TER) of approximately 1.25–2.50 percent/year.
  • As a result, the fees are much lower than those of a fund-of-funds solution, while still offering an appropriate level of diversification 
 

Access to the best opportunities

  • GCM Grosvenor's size and presence enable selectivity and negotiating power.
  • We focus on US middle market buyouts with a revenue of up to USD 1.5 billion.
  • The separate co-investment platform is run by a strong team of 13 dedicated specialists.
  • In line with its high ESG awareness, GCM Grosvenor integrates ESG criteria in the investment decisions.

Institutional approach and service

  • Our investment philosophy and our service are tailored to the needs of Swiss pension funds.
  • Local presence: We have experts on site and contacts in Switzerland.
  • We represent your interests and monitor the mandate thanks to our veto right.
  • We offer three diligence levels (GP, GCM and Zurich) without additional costs and with full transparency.
 

Focus on buyout co-investments

The focus is on buyout co-investments in the broad middle market segment in the USA and the EU. This segment offers a wide range of investment opportunities, but is less competitive than the large buyout segment. Therefore, entry opportunities are often more attractive.

Success already achieved with a similar approach in infrastructure

The Zurich Investment Foundation has already been successfully applying such a co-investment approach to infrastructure since 2013, has already made more than 30 co-investments and has committed a total of more than USD 1 billion in capital in three similarly structured vehicles.

Tax- and cost-efficient structure

Attractive conditions: Management fees are charged on capital invested, i.e. on the basis of the net asset value. Moreover, the fee layer at primary fund level is largely eliminated. Therefore, the total expense ratio (TER) is much lower than that of a conventional fund-of-funds solution. 

The target portfolio in a nutshell

  • Main focus on buyout co-investments in the middle market in the USA and the EU
  • Opportunistic addition of secondary and primary funds
  • Well-diversified across regions, industries, sponsors and financing stages
  • Faster portfolio build-up and capital calls than in a conventional fund-of-funds solution
  • Mitigation of J-curve effect due to lower costs and faster capital deployment compared to a fund-of-funds solution
  • Thanks to the veto right, investor interests are effectively represented

Key facts

 Name  Zurich Investment Foundation Private Equity Co-Investments I
 Legal structure  Investment foundation under Swiss law
 Investor group  Pension funds domiciled in Switzerland
 Currency  US dollar (unhedged)
 Auditor  PricewaterhouseCoopers (PwC)
 Minimum commitment  USD 150 million
 First close  Q3 2021
 Final close  12 months after the first closing, at the earliest
 Investment periode  3 years (with option to extend by 2 x 1 year)
 Term  12 years (with option to extend by 3 x 1 year)
 Management fee  1.1% (on the net asset value) 
 Performance fee  10.0% (at a hurdle rate of 8.0%)
 Expected TER  Approx. 1.25–2.50% (depending on the performance fee)

Our advisory service

Would you like further information? We would be glad to advise you.
Markus Binder
Markus Binder, lic. iur
Head of Institutional Customers
Hans Baumann
Hans Baumann
Customer Advisor Institutional Customers
Oana Ardelean
Oana Ardelean
Customer Advisor Institutional Customers
Marcel Wüthrich
Marcel Wüthrich
Customer Advisor Institutional Customers
Thomas Sonderegger
Thomas Sonderegger
Customer Advisor Institutional Customers
Peter Bezak
Peter Bezak, MSc MAS
Consultant Relations & Communication

Address

  • Zurich Invest Ltd
    P.O. Box
    8085 Zurich