In Buyouts Insider Isabel Dische Discusses Continuation Funds and Co-Investment Fees

Limited partners continue to request that GPs ensure no-fee co-investments do not transition into a continuation fund.

Alternative asset opportunities partner Isabel Dische told Buyouts Insider that “it’s not only the potential for future costs that have LPs worried. Other issues involved with continuation funds could crop up.”

“Now that there’s been a GP-led transaction, the tenor of the investment and how long that investment is going to be held gets extended,” she said. “Your relationship with the sponsor may have soured over that period of time, so you may not like the new time horizon. Or there may have been changes with the asset.”

“There’s a menu of ways we’ve seen investors approach GP-leds,” Isabel said. “We’ve seen GP-led deals where sponsors forget about co-investors to some degree or don’t think they have to deal with them, and then have to scramble at the last minute.”