PECO participants have the option to review and approve each co-investment opportunity. This allows our pledge investors to build a portfolio that meets their specific investment objectives. Our clients can decline to invest in a given investment opportunity without affecting their ability to participate in future investments. This allows for flexibility in the makeup of clients who invest in a given co-investment opportunity.
Usually our investors create individual target investment partnerships (“Target Investment, LLC”) for each investment in a Target Company. Each Target Investment, LLC acts as a co-investor alongside the Private Equity Sponsor. Together, each Target Company is owned by the Private Equity Sponsor and the Target Investment, LLC.
PECO’s network utilizes a pledge structure. That is, actual funding does not occur until specific co-investment opportunities are approved. This allows PECO participants to maximize their overall portfolio return, by maintaining control over non-invested cash.