Case Study: Co-Investment Strategic Partnership

case study

Co-Investment Strategic Partnership

50% GCM Grosvenor Sourced / 50% Client Sourced

This example was selected by GCM Grosvenor because it is representative of the types of services we offer and is presented for illustrative purposes only, and is not intended to be representative of GCM Grosvenor funds, strategies or investments. Unless apparent from the context, all statements herein represent GCM Grosvenor’s opinion.

 

Select risks include: information risk, management risk, risks related to reliance on third parties, and risks related to the sale of investments.

A large U.S state public pension plan had an existing private equity primaries business and wanted to establish an active co-investment practice.

 

Benefits of adding a co-investment program:

+ Private equity co-investments provide an opportunity that seeks to replicate the same exposures within primary funds, typically on a no fee/no carry basis

 

Challenges the U.S. pension plan faced:

+ Lacked governance process to quickly and efficiently assess and execute co-investments

+ Unable to source sufficient deal flow

+ Limited team and resources

 

Solution: Strategic Partnership with GCM Grosvenor

GCM Grosvenor collaborated with the pension plan to form a strategic partnership

Summary

+ Evergreen structure program launched in 2019

+ In the first four years, initially targeting 50% in GCM Grosvenor sourced co-investments and 50% in U.S. public pension plan sourced co-investments

Strategic Partnership Overview

1. Deals sourced from GCM Grosvenor
+ GCM Grosvenor sources the co-investments, conducts due diligence and executes each deal with full discretion
+ Leverages GCM Grosvenor’s scale and deep, long-term industry relationships to identify opportunities and generate capacity in situations that may be hard to access

2. Deals sourced from U.S. public pension plan
+ Leverage GCM Grosvenor’s staff, resources and expertise to execute co-investments sourced from the public pension plan’s existing private equity primaries portfolio    
+ At the client’s request, GCM Grosvenor will complete preliminary due diligence, comprehensive due diligence and deal execution    
+ GCM Grosvenor provides monitoring, reporting, cash flow projections and program modeling on an ongoing basis

Benefits of a private equity co-investment strategic partnership with GCM Grosvenor

Diligence & execution

Extension of existing staff

Tactical, efficient capital deployment

Routine deal flow and client update calls

Targeted exposures across multiple metrics

This example was selected by GCM Grosvenor because it is representative of the types of services we offer and is presented for illustrative purposes only, and is not intended to be representative of GCM Grosvenor funds, strategies or investments. Unless apparent from the context, all statements herein represent GCM Grosvenor’s opinion. Past performance, if presented, is not indicative of future returns, and it should not be assumed that any future investments will be profitable.