Private equity and co-investing for family offices usually means investing in a specific deal alongside a lead sponsor (often a PE firm) or alongside other families, instead of putting all the capital into a blind pool fund. 

Co-investing can be a strong tool for selectivity, fee efficiency, and access, but it also shifts real work to the family office: structuring, diligence, funding mechanics, ownership mapping, valuation tracking, and repeatable reporting.

This guide focuses on co-investment structures and strategy, with the operational playbook you need to run them well in a single family office or multi-family office.

Key takeaways

What co-investing means for a family office

A co-investment is a direct investment into a specific company or asset alongside another investor (often a private equity sponsor). You are investing in the deal itself, not just in the sponsor’s fund.

Co-investing is not the same as:

The defining feature is shared participation. You are on the same deal, usually on similar economic terms, with a partner who is leading or coordinating.

Why family offices co-invest and when they should not

Why co-investing can make sense

1) Selectivity
You can choose specific deals that fit your risk profile, time horizon, and values, rather than accepting a full fund portfolio.

2) Fee efficiency
Many co-invest opportunities are offered with reduced economics relative to a fund commitment. The structure varies, but families often pursue co-investments partly to reduce layered fees.

3) Access and leverage of sponsor work
You may get access to deals you would not source alone, while benefiting from the sponsor’s underwriting, negotiation, and portfolio management.

4) Ability to size exposure intentionally
Co-investing lets you increase exposure to a specific deal, sector, or sponsor relationship without committing a full additional fund allocation.

When co-investing is a bad fit

Co-investing can be the wrong move when:

A practical rule: co-investing is a capacity decision before it is an investment decision.

The three most common co-investment structures

Most family office co-investments fit into one of these patterns. Your choice will drive admin workload, control, and reporting complexity.

1) SPV for a single deal

What it is
A special purpose vehicle (SPV) is a dedicated entity set up to hold a single investment. The family (and sometimes other co-investors) invest into the SPV, and the SPV invests into the target.

Why it’s used
It keeps the cap table clean, isolates risk, and lets you tailor tax and governance details for that deal.

Tradeoffs
You gain clarity and isolation, but you also create more entity-level accounting and documentation.

2) Club deals (multiple families investing together)

What it is
A small group of families (and sometimes aligned investors) invests together in the same deal, often with a lead organizer coordinating terms and diligence.

Why it’s used
It shares diligence workload, can increase buying power, and spreads concentration risk.

Tradeoffs
Coordination becomes a real cost. Decision speed can slow down. Reporting expectations may differ across participants.

3) Sidecar or co-investment vehicle alongside a GP

What it is
A sidecar is a parallel vehicle used to invest alongside a sponsor’s main fund. It can be deal-specific or used for a set of deals.

Why it’s used
It makes co-investing more programmatic. You get repeated access without reinventing the structure each time.

Tradeoffs
You are more dependent on the sponsor’s allocation policy, timelines, and reporting style.

Structure comparison table

Term sheet and rights that matter in co-investments

If you want co-investing to feel smooth, focus on rights and mechanics early. These items often matter more than the headline valuation.

Economics and cost allocation

• Fees, carry, and any sponsor economics on the co-invest slice

• How deal expenses are allocated (legal, diligence, broken-deal costs)

• Ongoing expenses (admin, audit, tax prep, SPV maintenance)

• Any monitoring or board fees and who receives them

Information rights and reporting

• Financial reporting frequency and format

• Budget and KPI reporting expectations

• Timelines for delivering statements and valuation updates

• Access to portfolio company materials (within reason)

Governance and control

• Board seat, board observer rights, or none

• Reserved matters requiring investor consent (major actions)

• Voting thresholds and what happens if investors disagree

Follow-on funding and dilution

• Rules for follow-on capital needs

• Pre-emptive rights and dilution protections

• What happens if some investors cannot or will not follow on

Exit mechanics

• Tag-along and drag-along rights

• Transfer restrictions and liquidity limitations

• Sponsor exit authority and process transparency

Conflicts and allocation policy

• How the sponsor allocates deals between the fund and co-investors

• Related-party transactions policy

• Treatment of fees, expenses, and refinancing proceeds

One sentence your team should be able to answer at any point: “If something goes wrong, who can decide what we do next?”

Due diligence: what a family office needs to be able to do

Co-investing does not remove diligence. It changes who owns it.

Some families rely heavily on the sponsor’s work. Others build their own view. Most end up in the middle: validate the sponsor’s thesis, stress test downside, and confirm structure and reporting are workable.

Co-investment diligence checklist (copy and use)

Commercial

• Clear thesis in plain language (why this wins, not just why it exists)

• Market size and competitive dynamics

• Customer concentration and churn risk

• Pricing power and margin drivers

Financial

• Quality of earnings and working capital needs

• Leverage profile (if any) and covenants

• Cash flow resilience under downside cases

• Capex requirements and reinvestment needs

Legal and structural

• Ownership structure and cap table clarity

• Key terms and investor rights

• Related-party transactions exposure

• Regulatory and licensing risks (if applicable)

Tax

• SPV jurisdiction implications

• Withholding risks and filing obligations

• UBTI or other tax concerns depending on investor profile

Operational

• Management team assessment and incentives

• Reporting capabilities (can they deliver clean data)

• Cybersecurity posture and controls

• Key supplier or operational concentration risks

Exit

• Realistic exit paths and timing

• Sensitivity to multiples, rates, and buyer universe

• Follow-on funding needs before exit

If your office is lean, decide upfront what you will do internally and what you will outsource. “We will figure it out later” is how diligence becomes a fire drill.

The back-office reality: capital calls, allocations, and multi-entity ownership

Co-investing creates operational complexity even when the investment is simple.

Capital calls and funding mechanics

You need a repeatable process for:

• Approvals (who signs off)

• Wiring (who executes, who verifies)

• Documentation (where notices live, how you prove timing)

• Matching cash movement to accounting entries

One missed step can create months of cleanup.

Multi-entity ownership mapping

Family investments are rarely held in a single entity. Co-invests may sit in:

• Trusts

• Holding companies

• Family partnerships

• Foundations

• SPVs under specific entities

Your reporting breaks when ownership is not mapped cleanly from day one.

Allocations and distributions

Even if your co-invest does not have a classic fund waterfall, you still need:

• Consistent treatment of fees and expenses

• Clear tracking of capital activity by entity

• Distribution tracking and matching to source events

• Documentation for audit and tax season

Valuation cadence and freshness

Private investments are not daily priced. Your reporting must show:

• Valuation date (“as of”)

• Source (company report, sponsor mark, third-party appraisal)

• What changed since last mark

• Stale marks that should not be treated as current

A portfolio view without freshness labeling is a trust problem waiting to happen.

Reporting: what the family actually needs to see

Families do not need more pages. They need fewer, clearer answers.

A practical reporting set for co-investing usually includes:

1) Co-investment one-page summary (per deal)

• Current value and valuation date

• Cost basis and net invested capital to date

• Key KPIs (3 to 6, consistent over time)

• Notable events this period

• Next milestones (follow-on, exit process, reporting dates)

2) Capital activity report

• Contributions by date and entity

• Distributions by date and entity

• Net cash flows by deal and by sleeve

3) Exposure and concentration view

• Exposure by sector, geography, sponsor

• Concentration by top positions

• Vintage year concentration (if relevant)

4) Valuation status report

• Last valuation date by investment

• Stale marks and reasons

• Expected update timeline

5) Entity rollups and consolidated view

• How each co-invest rolls up into household or family-level reporting

• Entity-specific performance where needed

If you can produce these five consistently, you are ahead of most “ad hoc co-invest” programs.

Building a repeatable co-investment program

Co-investing works best when it becomes a program, not a series of exceptions.

Roles to define

• Deal lead (investment owner)

• Diligence lead (coordinates workstreams)

• Legal and tax owner (structure, docs, filings)

• Controller or finance owner (capital activity, reporting)

• Approver group (IC or family governance body)

A simple workflow

90-day co-invest readiness plan

Weeks 1–2: Define the rules

• Write investment criteria for co-invests (size, sector, sponsor type, hold period)

• Define approval thresholds and who can wire funds

• Create a standard term sheet review checklist

• Decide what reports the family wants (and how often)

Weeks 3–6: Build the operating kit

• Create diligence templates (memo, downside case, risk log)

• Define the ownership mapping standard (how entities are represented)

• Create capital call and distribution processes (approvals, documentation, accounting entries)

• Set valuation freshness rules (what “current” means)

Weeks 7–12: Implement and test

• Run a pilot workflow on one existing deal

• Build the reporting pack (one-page summary + capital activity + valuation freshness)

• Establish document storage and version control

• Lock a monthly or quarterly cadence with sign-off ownership

The goal is not perfection. The goal is repeatability.

Where FundCount fits

Co-investing increases the number of entities, capital events, and reporting expectations a family office needs to handle. FundCount can serve as a back-office foundation for this work by keeping portfolio activity, partnership allocations, and general ledger reporting connected in one controlled system. That matters when co-investments are held through multiple SPVs, trusts, or family entities and you need consistent rollups without rebuilding ownership logic in spreadsheets. 

FundCount also helps when you need repeatable reporting packages that tie back to transaction-level records and supporting documents, especially around capital calls, distributions, and quarter-end valuation updates. In practice, the benefit is operational: record events once, map ownership clearly, and produce consistent reports with traceable inputs.

Common pitfalls

Pitfall 1: Agreeing to the deal, then discovering the admin load

Fix: decide structure, reporting, and ownership mapping before you sign.

Pitfall 2: Entity structure is unclear, so reporting never ties out

Fix: formalize the ownership map and keep it updated as entities change.

Pitfall 3: Documents are scattered across emails and portals

Fix: maintain a single document home with clear naming and version control.

Pitfall 4: Valuation dates are not visible, so stakeholders misread results

Fix: put “as of” dates on every private mark and highlight stale valuations.

Pitfall 5: Follow-on funding surprises the family

Fix: include follow-on scenarios in the downside case and define your follow-on policy.

FAQ

What is co-investing in private equity for a family office?

It is investing directly into a specific deal alongside a sponsor or other investors, rather than only investing through a commingled fund.

What is an SPV and why do family offices use it?

An SPV is a dedicated entity created to hold a single investment. It simplifies cap tables, isolates risk, and can make ownership and reporting cleaner, but it increases entity-level administration.

What is a club deal?

A club deal is a co-investment where multiple families invest together, often coordinated by a lead organizer. It can improve access and share diligence work, but it requires coordination and consistent reporting expectations.

How do lean family offices handle diligence?

They define what they will validate internally and outsource the rest. They also standardize their diligence process so they can move quickly without skipping fundamentals.

What reporting should we require from a sponsor?

At minimum: consistent financial reporting cadence, clear valuation dates and methodology summaries, and timely notice for capital events and material changes.

Conclusion

Co-investing can be an effective way for family offices to participate in private equity deals with more selectivity and potentially better economics. It can also create operational risk if you treat it as a one-off activity.

If you want co-investing to scale, focus on three things early: the right structure, the rights that matter, and a repeatable operating model for capital activity and reporting. When those are in place, co-investing becomes less reactive and more like a program your office can run with confidence.