Private Equity – Co-Investments in a changed market environment

Munich | April 2020

After more than 10 years of uninterrupted economic upswing, Covid-19 caused an external shock that poses enormous challenges to the world economy. The private equity asset class must also face this new environment. The number of traditional buyouts focusing on healthy, growth-oriented companies is expected to fall significantly in the short to medium term, while complex transactions are likely to increase. The focus will be on rescue financing and restructuring (balance sheet and/or operational). This environment offers attractive investment opportunities especially for managers with a focus on special situations. The following article is intended to show how co-investments can also offer attractive returns in the current phase of the cycle while at the same time providing a high degree of downside protection.