What do family offices expect in a co-investment?

Clear terms and a defined role

A co-investment usually lets a family office invest alongside a fund or lead investor in a specific company. The lead often sources and evaluates the opportunity, while the family office participates more passively. That role should be clear from the start, including who makes decisions, what information the family office receives, and whether it can influence major actions.

Understand the structure before evaluating the economics. A direct investment puts capital into the company itself. An indirect investment may use a special purpose vehicle or another entity. Ask who controls that vehicle, how decisions are made, what expenses it carries, and how distributions and exits will work. Do not assume that terms from a fund investment or a club deal apply automatically.

Fees, diligence, and alignment

Family offices often look for lower fees than they would pay through a standard fund commitment, since the lead may already have sourced and assessed the company. That expectation needs to be negotiated. Clarify management fees, performance fees, transaction costs, and any other expenses, along with who bears them and how they are calculated.

Review the investment case independently, even when the lead has done substantial work. The family office should have enough time and access to assess the business, valuation, key risks, financing, and exit assumptions. Ask how the lead's interests align with co-investors, including how much the lead is investing and whether it may face conflicts across funds or other holdings.

A workable process

Co-investments can arrive as an additional opportunity rather than as a fully planned partnership. The timeline may be short, so a family office should know in advance who can review and approve a deal, what information its decision makers need, and whether it has the internal capacity to monitor the investment after closing.

The practical test is whether the opportunity fits the office's objectives, resources, and risk tolerance on terms it understands. A compelling deal does not remove the need for clear documentation, realistic expectations, and agreement on reporting and exit processes. Each opportunity deserves its own review; participation should never be treated as a guaranteed path to returns or future allocations.