Private Equity Co-Investments I

Private Equity Co-Investments I

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.

Product update Performance

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.

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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.

Two shamrocks sprout from the earth and a town can be seen in the background

Why invest with co-investments?

Learn more about the advantages of private equity investments in our video with Marina Stoop, Senior Analyst.

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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

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)
Seed capital	USD 245 million
First close	29.11.2021
Final close	23.05.2023
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)