Fadi Samman Quoted in PEI on Investor Appetite for Co-Investments

Private Equity International has quoted Akin Gump investment management partner Fadi Samman in the article “Investors seek solace in highly targeted single deals,” which looks at how the desire for exposure to assets via co-investments and single-asset secondaries defied the pandemic last year. In fact, the article reports, co-investments’ share of all shadow capital in 2020 was 32 percent – the same proportion as 2019.

Co-investments and single-asset secondaries deals tend to be distinct in that they serve different purposes for different participants, the article notes. For sponsors, it says, co-investments serve as a tool to help facilitate fundraising and deal execution.

“To dilute the value of that tool is something one has to be very careful about,” said Samman. In a single-asset secondaries deal, sponsors want to achieve two things: hold on to prized assets for longer, and provide liquidity to limited partners. As liquidity becomes less of a concern, he explained, there is partial convergence in the fundamental nature of these transactions.

“I don’t think they’re directly competitive, or at least not yet, because sponsors use them very differently,” Samman added. Unlike co-investments where fee-free transactions are common, he added, there is almost always a fee in the secondaries deals, which also often contain multi-tiered carried interest levels based on different hurdles.