Data sourced from Dakota Marketplace, the global LP and GP intelligence platform trusted by thousands of investment professionals. Learn More | Book a Demo
Co-investment vehicles are one of the quieter growth stories in private equity. In Q3 2026, the Other category, which is primarily co-investment vehicles, raised $20.6B, or 11.2% of the quarter’s total fundraising.
That is more than secondaries took in, and it points to a steady shift in how limited partners (LPs) want to put capital to work.
What Is a Co-Investment Fund?
A co-investment fund pools capital from investors and uses it to invest alongside a sponsor in specific deals. Instead of committing to a blind-pool fund, where the manager decides what to buy after the money is committed, LPs in a co-investment vehicle back particular transactions the sponsor has already sourced and underwritten. The result is more targeted exposure and a clearer view of what the capital is funding.
How Co-Investment Funds Compare
Against a traditional buyout fund, the main difference is selectivity. A buyout fund asks LPs to trust a manager’s judgment across a portfolio that has not been assembled yet, while a co-investment fund gives them a narrower set of deals to evaluate. The Q3 review notes that co-investments offer LPs a way to deploy capital alongside established managers with lower fees and greater investment discretion.
Secondaries are the strategy most often discussed alongside co-investments. Secondaries fundraising reached $19.9B in Q3, up 27% from Q2, and the two strategies tend to appear together because they solve a similar problem: putting capital to work in a market where exits remain constrained.
The difference is where the capital goes. Secondaries buy into existing portfolios or stakes, while co-investment funds back new deals alongside a sponsor.
Why LPs Want Co-Investment Funds in 2026
Three themes stand out in the Q3 data.
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Lower fees and greater discretion. The report highlights lower fee structures and more investment discretion as core reasons LPs continue to show interest.
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Targeted exposure and a potentially shorter J-curve. Because capital goes into specific deals rather than a blind pool, co-investment can offer more targeted exposure and potentially reduced J-curve effects.
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A path to deploy capital while exits are subdued. Exit activity remains the main constraint on the market. Fewer distributions mean LPs have less capital to recycle. The report notes that secondaries, continuation vehicles, and co-investment have become a primary liquidity channel, since they return cash sooner and, in the case of co-investment, lower the fee burden.
Q3 Examples
Several of the quarter’s larger closes show where LP demand landed.
HarbourVest Partners Co-Investment Fund VII closed at $4.8B, one of the ten largest closes of the quarter.
Hamilton Lane Equity Opportunities Fund VI followed at $3.4B.
The report also names Pantheon among the co-investment managers that raised significant capital, though it does not give an amount. Together, these closes point to continued LP demand for targeted exposure with lower fees and potentially reduced J-curve effects.
What LPs Weigh
Every LP will approach co-investment differently, but a few considerations come up often. Deal selection matters, since the strategy is only as strong as the transactions on offer. Access to a manager’s pipeline matters too, because the quality and consistency of deal flow shape what an LP can see. And speed counts: co-investment opportunities can move quickly, so how fast an LP can underwrite individual deals is a practical factor. These are general considerations, not a checklist, and they will vary by LP.
What It Means for Fund Managers
For sponsors, co-investment is part of a broader product build-out. The Q3 review notes that established managers continue to expand into secondaries, GP stakes, co-investments, and evergreen strategies, which broadens their investor bases and gives LPs more ways to access the same manager relationships across multiple vehicles.
Francisco Partners closed both its flagship Fund VIII and Agility IV in the quarter, and CVC placed two vehicles among the ten largest closes. The report expects investors to see multiple vehicles from the same sponsor with increasing frequency.
For fund managers, that raises a practical question: which LPs are already active in co-investment and adjacent strategies? Dakota Marketplace helps fundraising teams find those allocators, see what they have committed to, and prioritize outreach.
What’s Next for Co-Investment, and How to Find the Allocators
Looking ahead, the report expects co-investments to keep attracting LPs seeking targeted exposure at lower fees. With exits still constrained and distributions limited, the same dynamics that supported co-investment fundraising in Q3 are likely to remain in place into the end of the year.
For fund managers, the next step is knowing which allocators are already active in these strategies. Dakota Marketplace is a global private markets intelligence platform that covers more than 250,000 allocator accounts, all verified to actively commit capital to outside managers, along with 386,000+ verified allocator contacts and 70,000+ private market transactions on file. Fundraising teams use it to identify which LPs are backing co-investment and secondaries, research allocator preferences, and prioritize outreach.
Want to see which allocators are backing co-investment and secondaries strategies? Book a demo to explore Dakota Marketplace.
