The strongest signal of confidence is shared capital
In private markets, trust is not built through words. It is built through alignment.
As professional investors allocate more capital to private credit and structured opportunities, one question increasingly sits at the centre of decision-making: Is my adviser truly aligned with me?
The clearest answer is co-investment. When an adviser invests alongside clients, risk is shared, incentives are aligned, and confidence becomes tangible. In markets defined by opacity and complexity, co-investment is one of the strongest indicators of conviction and discipline.
This article explains co-investment, explores the co-investment benefits investors should understand, and outlines how WIUS applies this ethos in practice.
What co-investment means in practice
Defining co-investment
At its core, co-investment means that an adviser or manager commits their own capital into the same opportunity as their investors, on substantially similar terms.
It is not a marketing label. It is a structural choice.
In private markets, where returns are negotiated rather than priced by an exchange, co-investment signals that the adviser is exposed to the same outcomes as their clients. Gains and losses are shared. Performance matters equally.
Co-investment explained simply
When advisers co-invest, three things happen:
- Decision-making becomes more disciplined
- Risk assessment becomes more conservative
- Long-term thinking replaces short-term volume
This is why sophisticated investors increasingly view co-investment as a baseline expectation rather than a differentiator.
Why co-investment matters more in private markets
Public markets offer transparency, liquidity, and regulation. Private markets do not.
Private credit and structured investments involve:
- Limited disclosure
- Illiquidity over defined terms
- Complex legal and cash-flow structures
In this environment, alignment is critical. Without it, investors may carry risks that advisers do not.
Co-investment reduces this asymmetry.
The core benefits of co-investment
Shared risk
The most obvious benefit is also the most important.
When advisers invest alongside clients, downside risk is shared. This creates natural discipline in how opportunities are sourced, structured, and monitored.
Co-investment discourages:
- Excessive leverage
- Over-optimistic assumptions
- Weak collateral structures
When capital is at risk on both sides of the table, decisions tend to improve.
Transparency
Co-investment encourages openness.
Advisers with capital invested in an opportunity have a direct incentive to understand every aspect of the structure. That understanding flows through to investors via clearer documentation, more detailed reporting, and more direct communication.
Transparency is not a regulatory obligation in private markets. It is a choice. Co-investment makes that choice rational.
Aligned incentives
Misalignment is one of the greatest risks in private investing.
Where advisers are rewarded primarily for volume, distribution, or fees, incentives can diverge from investor outcomes. Co-investment helps rebalance this dynamic.
When advisers participate economically in outcomes, priorities shift:
- Structure before scale
- Risk control before return targeting
- Long-term performance before short-term growth
This alignment is particularly relevant in private credit, where structural decisions define outcomes far more than headline yield.
Co-investment versus distribution models
Many private market platforms operate distribution-only models. They introduce opportunities, collect fees, and move on.
There is nothing inherently wrong with this approach, but it creates distance between advisers and outcomes. Once capital is deployed, the adviser’s exposure often ends.
Co-investment models differ materially:
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Sr.
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First
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Adviser exposure ends at placement
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Adviser capital remains at risk
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Incentives tied to volume
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Incentives tied to outcome
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Limited downside alignment
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Shared downside
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Shorter engagement
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Ongoing involvement
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For investors seeking durable relationships rather than transactional access, this distinction matters.
How WIUS applies a co-investment ethos
Alignment by design
At WIUS Capital, co-investment is not symbolic. It is embedded in how we operate.
Where appropriate, WIUS principals invest alongside clients in opportunities we source and structure. This reflects our belief that alignment strengthens outcomes and reinforces discipline.
We do not co-invest selectively to market confidence. We co-invest because it improves decision-making.
Structure first, returns second
Our co-investment ethos influences how opportunities are built.
Before considering return profiles, we assess:
- Asset backing and legal enforceability
- Cash-flow resilience
- Downside scenarios and recovery paths
- Jurisdictional and operational risk
Only once structure meets internal thresholds do we consider whether an opportunity merits investor capital.
This approach applies equally to WIUS capital and client capital.
Ongoing involvement
Co-investment also shapes how opportunities are monitored.
WIUS remains engaged throughout the investment lifecycle, with regular performance review, reporting oversight, and stress testing. This is not a passive role. It reflects our exposure to the same outcomes as our investors.
Why alignment builds long-term trust
Trust in private markets is cumulative. It is built over cycles, not transactions.
Co-investment fosters:
- Consistency in behaviour
- Accountability during underperformance
- Credibility during periods of market stress
When outcomes are shared, conversations change. Risk is discussed openly. Expectations are managed realistically. Long-term relationships replace short-term placements.
For family offices and professional investors allocating across generations, this matters.
Co-investment in litigation-backed and asset-backed private credit
Co-investment is particularly relevant in litigation-backed and asset-backed private credit, where outcomes depend on structure, legal enforceability, and execution rather than market sentiment.
In these strategies:
- Security and collateral matter more than pricing
- Legal rights determine recoveries
- Monitoring affects outcomes
Alignment ensures these factors receive the attention they deserve.
WIUS structures opportunities in this space with co-investment where appropriate because it reinforces the discipline required to manage complexity.
- Learn more about opportunities available to investors on our Investors page https://wiuscapital.com/investors/
- Explore how WIUS structures and manages private credit via our Investment Solutions page https://wiuscapital.com/investment-solutions/
- To discuss current mandates or co-investment opportunities, Contact WIUS Capital https://wiuscapital.com/contact-us/
Frequently Asked Questions
What is co-investment in private markets?
Co-investment refers to advisers or managers investing their own capital alongside clients in the same opportunity, typically on similar terms. It creates alignment by exposing all parties to the same outcomes.
Why do co-investment benefits matter to investors?
Co-investment aligns incentives, encourages conservative structuring, and reduces conflicts of interest. It signals conviction and discipline rather than reliance on distribution or fee-driven models.
Does co-investment reduce risk?
Co-investment does not eliminate risk. Private investments remain illiquid and complex. However, it improves risk management by ensuring advisers share downside exposure and remain engaged throughout the investment lifecycle.
Is co-investment common in private credit?
It is becoming more common, particularly among specialist managers and boutique firms. Many large platforms still operate distribution-focused models without adviser capital at risk.
How does WIUS approach co-investment?
Where appropriate, WIUS principals invest alongside clients in opportunities we source and structure. This reflects our commitment to alignment, disciplined underwriting, and long-term relationships.
Should co-investment be a requirement?
For many sophisticated investors, co-investment is not mandatory but increasingly expected. It is one of several indicators of alignment, alongside transparency, governance, and reporting.
Further Reading
- McKinsey & Company – Private Capital and Alignment of Interests
https://www.mckinsey.com/industries/private-capital/our-insights
Conclusion
In private markets, alignment is not theoretical. It is structural.
Co-investment demonstrates conviction, reinforces discipline, and builds trust over time. For investors seeking access to complex private credit opportunities, it offers a clear signal of shared risk and shared responsibility.
If you would like to understand how WIUS structures co-investment opportunities within litigation-backed and asset-backed private credit, we invite you to take the next step.
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Disclaimer:
This content is for general information only and does not constitute investment advice or a recommendation. All investments involve risk, and your capital is at risk. Opportunities discussed are intended for professional, high net worth, sophisticated and institutional investors only. Private market investments can be illiquid and complex, and you could lose all invested capital.
Written by Mark Boyes
Co-Founder, WIUS Capital
With over 15 years of experience in international financial services, Mark has managed and advised on assets exceeding $100 million across five continents. He has held directorships at two leading international financial advisory firms and built a strong reputation for delivering results in competitive markets. At WIUS Capital, Mark focuses on structuring litigation-backed and asset-secured private credit opportunities for professional investors worldwide, alongside advising private companies on capital raising and sustainable growth. Known for his transparency and strategic mindset, he is committed to helping investors and businesses secure long-term results.
Meet the Founders https://wiuscapital.com/meet-the-founders/
