Asset Management Partner Matt Posthuma Discusses Co-Investing and Disclosure in PERE
Two PERE articles examine key findings from its “Investor Perspectives 2020 Survey” and include insights from asset management partner Matt Posthuma on co-investing and fees.
A piece titled “Co-investing is a question of time and size,” discusses the finding that interest in the strategy is slowly growing, but a lack of time and sufficient staffing often prevent investors from pursuing it. “Co-investments continue to be opportunities that a lot of investors are interested in, often as a way of lowering their overall fees, because co-investments often have lower fees and carry,” says Matt. “From the sponsor perspective, when there’s a co-investment opportunity, they want to be able to move quickly,” Matt says. “They don’t want to have to survey all the 30 or 40 investors in their funds to see whether they are interested in providing capital.”
A separate article titled “Fees are a bone of contention for private real estate investors” highlights the finding that investors continue to find it hard to justify mounting costs and are asking for greater disclosure, noting that the SEC has been active in requesting real estate fund managers for greater disclosure. “The SEC has been examining real estate managers,” says Matt. “A few years ago, they looked closely at fees and expenses issues. As a result, managers have a much more robust and wholesome disclosure about what exactly they can charge the fund for.”