Traditional incentive structures
The traditional means of providing these individuals with an incentive, which is also designed to align their interests with investors in the main fund, has been through the use of carried interest. This has typically been structured through a carried interest partnership. Increasingly, managers are offering executives and staff the additional benefit of directly co-investing alongside the fund or, if the fund cannot invest, independently with other investors.
Challenges of co-Investment vehicles
Setting up formal co-investment vehicles is possible but often costly and time-consuming. Additionally, there is an ongoing administrative burden, management responsibilities, and costs associated with a new vehicle, which may outweigh the quantum of investment available.
Another consideration for a fund manager is that the co-investment in the portfolio company will usually remain within that company, even if the staff member holding the interest leaves the fund manager, regardless of the circumstances of departure.
Apex Unitas solution
Apex Unitas enables fund managers to facilitate staff investments in deals they've worked on while maintaining control. Apex Unitas assumes the administrative responsibilities, offering a flexible and cost-effective fund structuring option to support master funds.
If you are looking for a flexible and low-cost fund structuring option to support the master fund, Apex Unitas has the solution.
You can learn more about Apex’s Unitas here.
Disclaimer: This document is not intended to constitute legal or regulatory advice. Any client wishing to enter a relationship with Apex Unitas Limited should take its own independent legal, regulatory and taxation advice. This material (and the information contained herein) is not intended to constitute a financial promotion and is not intended to be investment advice.
Apex Unitas Limited is authorised and regulated by the Financial Conduct Authority FRN 591814.
