A quiet shift is underway in how Indian family offices deploy capital. Instead of writing cheques into funds and waiting for quarterly updates, more families are co-investing directly alongside PE and VC managers — sitting closer to the deal, with more visibility and often better terms.
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Co-investment structures becoming more common among Indian family offices
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PE/VC
Family offices partnering with domestic and global fund managers
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Direct
Involvement in deal sourcing, due diligence and post-investment governance
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2026
Expected to be a landmark year for family office private market participation
What Co-Investing Actually Means
Traditional Route
LP in a Fund
You commit capital to a fund. The manager decides where it goes. You get quarterly reports and your share of returns minus fees and carry. Limited visibility, limited control, standard terms.
Emerging Route
Co-Investor Alongside the Fund
The fund manager brings you a specific deal. You invest directly alongside the fund — often with no additional management fee or carry on the co-invested portion. You get visibility into the specific company, not just the blended fund.
Advanced Route
Direct Investment with Fund as Partner
For sophisticated family offices — sourcing deals directly, with an experienced PE/VC partner providing due diligence and governance support. Highest potential return, highest required sophistication.
Why This Matters for Mid-Sized Family Offices
Fund-Only Approach
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2% management fee + 20% carry on everything✗
Blended exposure — can't choose specific companies✗
Limited transparency into individual holdings✗
No say in governance or strategic decisions
VS
Fund + Co-Investment
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Often zero fees on co-invested capital✓
Choose which specific deals to participate in✓
Direct line of sight into the company✓
Potential board observer or advisory rights
The Risks — Said Plainly
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Concentration Risk
A co-investment is a single-company bet. Unlike a diversified fund, if that company fails, you absorb the full loss on that allocation.
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Speed of Decision-Making
Co-investment opportunities often come with tight timelines — days, not weeks. Families need a pre-agreed framework for evaluating these quickly.
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Due Diligence Burden
Even with the fund manager's diligence, the family bears the ultimate decision. Independent review — especially of terms and structure — matters.
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Illiquidity
Like all private investments, co-investments are illiquid for years. This must be capital the family genuinely does not need.
Is Co-Investing Right for Your Family Office?
Co-Investment Readiness
Self-assessment
Existing relationships with PE/VC fund managersRequired
Capacity for fast decision-making (days, not weeks)Required
Access to independent due diligence supportImportant
Allocation already in private markets via fundsHelpful starting point
Comfortable with single-company concentrationMust be true
Co-investment access is a privilege that comes with relationships — and relationships take years to build. For most families, the right starting point is still a well-chosen Category II AIF. Co-investing is the next step, not the first one.
— CA Rohit Gupta, VP Investments & Alternatives, NextGen Family Office Services
Building Toward Private Market Access?
We help families build a structured path into alternatives — starting with the right funds, building the relationships, and eventually accessing co-investment opportunities when the family is ready.
Discuss Your Private Markets Strategy →