E356: Why Co-Investments Are Taking Over Private Equity

Ohan, you're at Hulohan Loki, which is a top boutique investment bank. And you focus on private equity co-investments. Why are there so many private equity co-investments happening in the market today? Taking a step back, it's helpful to frame this in the context of the market that co-investments are operating in. When you look at equity co-investments, this sits broadly within what we call directs, which includes direct equity, but also co-investments. And that market has experienced significant growth, particularly over the last five years, where it was in the 150 range back in 2021. and in 2025, trending well north of $300 billion annually. This is a market that's experiencing significant growth and has a lot of attention. When you zoom into co-investment specifically, this is a market that is in 2024, did well north of 30 billion, which was a peak and was trending to surpass in 2025. So continuing that momentum and definitely has a lot of attention. When you go into specific deal drivers for co-investment deal flow, I think there's three ways I think about that. Markets, GPs, and LPs. On the market side, We've seen a very extended time horizon for blind pool fundraising, many funds taking 18 to 24 months to close, particularly longer when you're a first-time or emerging manager. You couple that with extended time horizons for distributions, which is preventing LPs from committing again to blind pool funds. You have a lot of factors that are driving deal-by-deal fundraising and deal-by-deal execution. As funds have gotten larger, deals have also gotten larger. So the requirement for capital outside of what their fund can support has also increased. That's driving a lot of co-investment flow, even beyond what existing LPs that are in the funds can support. So you're seeing groups like us really benefit from that since we are working side by side with GPs who are looking to raise new third party co-invest capital. So it's kind of a perfect storm that's driving the deal flow. There's obviously a fee aspect to that where oftentimes co-investments are used to drive down fees, especially management fees. But there's more to it. Why are LPs trying to do more co-investments? What's behind that? Co-investments are now really being seen as a standalone asset class within private equity. So LPs are increasing their allocations specifically for this part of the market. And a big function of that is just really seeing the trend of outperformance over time, where individual deals through selection are oftentimes higher conviction and are generating stronger returns. Obviously, that's not a universal truth, but I think there's a lot of data to suggest that where a GP is highly convinced in a deal and is looking to raise capital, and this may be one that there's a lot of attention. I think that's a driver. But really from the LP side, it's also just the increasing sophistication. As programs have evolved, teams are becoming more adept in underwriting deals. And as a result, having those capabilities is driving kind of an internal focus on selection where you're optimizing your portfolio, expanding where you have exposure to strategies or geographies or with different managers and assets. So it really does serve as now a tool to optimize a private equity portfolio for a program. Co-investments, there's different flavors of them. What are the different flavors and what's most attractive to LPs today? Where we look at co-investments, they come from either funded sponsors, oftentimes having committed funds with LPs, but we also are seeing them with independent sponsors. So groups that don't have committed pools of capital and operate in this model as either a way to build a firm or as a transition into a blind pool fund. So I think there is varying degrees of attractiveness across both those platforms. What we see is on the funded sponsor side, it's a lot more common and people are expecting it because it's something that's been used as long as private equity has been around. On the independent sponsor side, I think you're seeing more and more potential in that market. So there are growing numbers of very sophisticated investment professionals leaving blue chip pedigreed firms where they're now looking to set up something on their own, but are using that independent sponsor model as a transition to help build a track record of their own. And you're even seeing that some of those groups stay in that model longer or in perpetuity because of, you know, the advantages of operating this model. So when we think of co-investments, it can be various types of managers. But, you know, fundamentally, I think that the structure is very similar. And you referenced this blue chip managers doing these independent sponsored deals. McGraw-Woods just had a conference with 2,000 independent sponsors. I'm seeing people reach out to me every day, super blue chip people from Blackstone, TPG, KKR, etc. that are doing these independent sponsored deals. What accounts for so many blue chip sponsors being willing to go on their own and become independent sponsors? Over the last five years, particularly, this market has absolutely exploded. I've seen, I think, north of 1,400 independent sponsors now operating, which is double what it was in 2019. So growing number of people, what's important is how sophisticated and attractive those platforms are. That continues to grow every day. So I think what's really attractive about this model, and it's very similar to a co-investment model. These professionals are very experienced with this, having raised co-investment capital at their prior firms. But you're seeing, given kind of that pull from the LP side, where this is now something that's very in demand, you have the market conditions where this model is sustainable. And when you think about the GP side, there's a lot of advantages to operating without the kind of confines of a blind pool fund. You retain a lot of ability to be opportunistic in your deal selection, within reason, of course, given LPs are looking to see you stay within your strike zone. But you also reduce a lot of the need right away to go and build a team because if you're a good deal professional and you have a good network, you can source deals. That's what people like to see early on in a funds kind of life cycle. But you also have a lot less of the administrative overhang from long fundraise and time before you can go out into market. There's a lot to be said about leaving a shop where you have a lot of momentum and hitting the ground running with deals on hand. And I've heard these crazy GP commit numbers for independent sponsors. Is it truly typical for a fundless sponsor to commit 5%, 10% GP commitment to these deals? And where's the market like? 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And I think what LPs really like to see, you know, obviously you don't have the full track record to go and underwrite, especially if you're kind of doing deals one, two, and three. So you're looking to see conviction beyond what the track record from your prior firm may or may not be. GP commit shows a strong sense of alignment. There's a number of other factors that go into what makes a really good independent sponsor deal. But, you know, a lot of those look very similar to a co-investment process. So, you know, do you have an inside track? Does it fit well within your strike zone of what your strategy is and you've executed on in the past? That coupled with strong GP commit and kind of founder role and all those things together are important. But yeah, absolutely. I think the market for GP commit has moved up to that level. And you take on just a small sliver, single digit percentage of the deals that come on your desk. What are you looking for as an intermediary to decide to spend your time working with an independent sponsor? We like to take the approach that we will take to market what we know LPs are looking for, because I think that's the strongest validator of deal is if we know that we have people in our network looking for something that looks like that All that to say we take a very similar underwriting lens So thinking about sponsor asset and structure of the deal We are obviously working on transactions So we very much deal first So you know thinking about is this a company that sits within a market that has good tailwinds? Is it a company that we can clearly identify merits to this investment and don't have immediate risks? Like, is there limited customer concentration, good geographic exposure, operating in a market that is growing and has tailwinds. So, you know, that's kind of the first, you know, avenue. Then you look at the structure, obviously, like, is this in a down market going to offer some sort of downside protection? We saw in 2023, 2024, a lot of groups starting to look for more credit-like instruments, preferred equity, things like that, where you have some sort of contracted return with some equity upside. So you have things like that, that helps the case for us to take on a deal when we're seeing 20 and can take on one. And then there's valuation that kind of goes coinciding with that, you know, are you paying a below market multiple, I think groups always like to see that GPs have an inside track, this deal is not widely shopped, where there's not a ton of competitive tension. So you're getting it at a fair price that leaves room for expansion on the other end. And then the final piece of structure would kind of be what is the economic proposal and governance look like and co investments, particularly with independent sponsors, you're seeing that people really are focused on that because they want to ensure the alignment and you know that they can contribute. And the last piece would be the sponsor element, which, you know, I think is where LPs historically have always focused. We look at, you know, the groups that have investment professionals that have very strong track records. Like, were they able to take something with them from their prior firm and demonstrate success within their realm of expertise? Is it a team of three to four investment professionals with some operating resources? Or is it an individual or two that are just setting up shop? So, you know, we're looking for a lot of the things in that case that an LP would from a manager. When we last chatted, you told me some of the numbers, how big some of these co-investments get. Give me a sense for those numbers and who are the LPs that are investing these sums of capital. There's a very broad dispersion in deals. I think when you're working with some of the independent sponsors, you still see very high quality deals in that 25 to 50 million range. And I think that's intentional when you're building a firm. Your first deal, you don't want to go over your skis too much. You want to show that you can get the deal done, raise the capital. And oftentimes if you're leaving a firm, you don't have the huge LP network right away. So you're still seeing a lot of those deals at that end of the market and they're getting done. But over the last five and a half, six years that I've been doing this, we've seen that number really grow meaningfully. Like I've worked on co-investment deals that are north of a billion in equity. And these are with sponsors that don't have committed funds associated with that strategy. There is a little caveat there where some of these co-investment vehicles that are being raised for a deal that are significantly larger are being led by established managers that have committed funds. But we've also worked with independent sponsors that are doing deals that require 300 to 500 million of equity. And I think that coincides with their growing institutional quality. There's a lot of independent sponsors that would love to do a deal that's $300 to $500. What needs to be present for an independent sponsor to pull off a deal of this magnitude? You start with the sponsor quality and the track record. Have they done it before? If this is deal number one and they don't necessarily have the track record to speak of, it's a little bit tougher. But if you've come from a blue chip firm, you've shown that you can raise and deploy large sums of capital and then get to an exit on those transactions. That's like the first hurdle that a lot of independent sponsors need to cross. Then I think it really goes down to, again, how high quality is the asset? Is the valuation fair? But, you know, what does the package look like? Are you partnering up with an established manager that may take on, you know, 30 to 50% of that equity? That helps an independent sponsor early on and gives a stamp of validation to a transaction where you're bringing on a partner that will help with that value creation, but also, you know, bring some of the capital and the infrastructure. For example, you might be a smaller partner, a smaller team. Let's say you even spun out of KKR, you still have a great relationship with KKR, KKR might lead or co-lead the deal, and you might be doing a lot of the value add and helping and they'll carve out a chunk for you. Yeah, absolutely. That's a really good setup that we like to see with independent sponsors is where the capital may be spoken for from that larger partner, but you retain the ability to syndicate some of that down, and you're really going to be the one driving the deal after close. That's some of the things that we like to see. I think obviously good deal dynamics, good relationship with the founder, proprietary track, attractive valuation, good structure, founder role. I think that's a strong show of alignment there, where the founder or the management team of the business is rolling 20% to 30% of their equity, staying on board. It shows continuity. It shows that you have the relationship and you're going to be able to work with them. Going back to your other question, who's investing in these? Particularly within independent sponsors, And, you know, the aperture is a lot wider when you look at broader co-invest. But we've seen the market there go from predominantly family offices and, you know, SBIC funds and other private equity firms back in 2017 to 2019, where today you're seeing insurance companies, endowments, foundations, pension plans, sovereign wealth funds, all of the large allocators having sleeves of capital that are earmarked for co-investment transactions. And a lot of them do have reserves to go and do independent sponsored deals, you know, albeit in various forms where, you know, some of them are looking for a bit more of a seat at the table or ride shotgun alongside. I'm going to force you into a binary answer. So let's say you have 100% or 100 points on deal, then LP is diligencing. How much of that is allocated to the deal itself and how much to the team behind it? For these groups that have very sophisticated underwriting platforms, when they're looking at the deal, they're thinking about what their role is going to be. So they know they're coming in as a partner and they're going to have 50% of the equity. I think the deal becomes far more important and you're starting to see 60 to 75% of those points going toward the deal because they know they're retaining some of that control and the ability to correct the ship if things go south. in a more traditional independent sponsor deal with a family office. I think the sponsor is incredibly important because in a passive role, you're taking the same approach as you would to putting money into a fund. You're banking on the manager to go and make the right decisions. So in that case, is it 50-50? Maybe is it 60-40 skewing to the sponsor? It might be somewhere in that range. That toggle is based on what the deal looks like and the structure is going to look like. said another way, it's hyper rational in both cases. If you have a sophisticated partner, worst case, they end up having to do all the work. They care a lot about the underlying deal. As long as I guess the partner checks the boxes, there's no fraud, no negligence, no really black marks on that team. Versus if you're a family office and you're looking for that team to drive it to provide the value add and make sure that the investment is ultimately successful, you're going to be heavily underwriting the team. The team is the party that's going to make sure that the investment successful. Yeah, absolutely. Hit the nail on the head there. Continuation vehicles have now grown to, as of late, I think $110 billion. How big of the space are continuation vehicles? Where we look at directs, we see a lot of overlap with how folks are looking at single asset continuation vehicles and directs. I think there has definitely been, over the last 10 years, a hyper focus on continuation vehicles, and that market has definitely exploded. So when we think about the overall pie of single asset equity, that piece today might still be, you know, relative to an independent sponsor transaction, a lot larger of, you know, the pie, but we're starting to see a lot more overlap. And especially from the LP perspective of how their programs can commit to both where, you know, if we're marketing a co-investment, especially if it's kind of a midlife deal looking to do an add on, it looks a lot like a secondary continuation vehicle. And you're underwriting for a lot of the same attributes. A lot of these co-invest deals, whether with a dedicated capital pool or the independent sponsor, a lot of it starts on the deal, like you mentioned. Is the deal good? But there's also strategic considerations, both from the GP and the LP side. How can these co-invest lead to a longer term relationship between the GP and LP? and how should GPs and LPs think about that in this context? The co-investment space is very much relationship equity driven from the perspective of a GP. LPs who are equipped to provide co-investment advantageous because as we mentioned, deals are getting larger as funds get larger. It's very likely that you're going to continually see the need for additional capital. And if you have LPs who are in your fund or in your network, it's a lot more efficient than going out and raising third-party capital. Granted, that process is becoming a lot more streamlined and we're doing it every day and seeing a lot of demand for products like that, which we love. But starting at that element, that this is a relationship game. So from a GP perspective it always super helpful to have LPs who can do it From the LP side I think co are still a great tool that you can use to get to know a GP Similarly when we talk to LPs the best currency is always a deal I think as GPs are getting to know LPs, the best currency is always a deal. Because especially for groups that have the capability to go and underwrite not only the sponsor, which is a legacy business, but also the transaction, you're really getting to see how a GP works and thinks and goes through their diligence and then will enact their value creation. If you can get there on a deal, there's no better way of underwriting a GP than riding alongside them for that transaction and understanding whether it is something that can develop into a longer term partnership. So let's go to venture. How much of the venture ecosystem is driven by these co-investment deals and how do they differ from traditional private equity co-investments? Personally, I haven't spent a ton of time on the venture space. I find it very interesting and think it's a very natural extension of what this product can do. But from conversations with several folks in that space, I think they really do operate on this model where they are raising capital deal by deal, especially early on as they're doing their first, you know, up to sometimes 10 or 15 deals. Some of the challenges of going and running a process for a venture product is the timeline. And I think the information that's often available, where if you're a venture investor and you understand the company and you have your buy box, it's a lot easier to understand and move on a quick timeline. but consequently alongside that you need LPs who can do the same. So I think that has kind of driven why we have been toying with it, but haven't fully dove in just because, you know, we know our LPs and they may need four to six weeks to go through a process, but you may have two weeks if you want to get your allocation in a venture transaction. But I do think that this model is very replicable in a venture, especially to the extent you're an early investor and you kind of understand, you know, what's the add-on going to be? What's the growth strategy going to be? and you have a two to three month lead time, where if you're helping drive that platform and you're gonna be able to have a sizable allocation, this is a really good way to build that stable of investors and also kind of demonstrate a lot of the things that LPs are looking for from a private equity investment. So limited thus far, but I think a lot of room to grow in this space given what I've heard venture investors have been successful in doing on their own through their networks. It's interesting because I see co-investments as a sway to become inevitably successful. So if you think about a franchise that's building and that wants to be inevitably successful, if that franchise does enough deals, whether it's deal two, deal four, deal seven, at some point it becomes a consensus bet and becomes obvious that that manager is good. So a lot of people are sitting around waiting for this magical anchor to come in and to build their franchise. The proactive managers that I see are going in systematically building out their track record. Absolutely. And I've talked to folks that have wanted to work with us in the past and they have successfully raised hundreds of millions of dollars in this deal by deal model and put out 15, 20 deals a year, albeit smaller scale at each check. And that's only because they don't have the ability to give a group like us two to three months to go and run a process for them. But to the extent that they were able to, and this is a conversation I have with these guys very often, is, you know, how can you build that timeline in and therefore, you know, increase your checks, be more opportunistic in your deal selection, you know, all of the things that we think about from a private equity lens. LPs are looking to do more into co-investments. It's not just family offices. I've had Ivy League endowments telling me that they want to do more co-investments because they want to invest less into blind pooled vehicles. For LPs that are looking to start a program, what are some best practices and how do they avoid being adversely selected? Going to that adverse selection concept, I go back to the statement that this is a relationship business and GPs are looking to build long-term relationships with LPs. So while there might be a inherent notion that some of the deals that are being shown are either too big or lower quality and haven't been able to be filled, when you look at this in the context of being a relationship business, the incentives aren't there to show lower quality deals. When thinking about building this program and avoiding that adverse selection, I think structuring and underwriting to mitigate is the way to avoid it. So, you know, when you are underwriting these platforms, are you going to be, you know, blindly going in or are you going to look at their co-investment track record? It's, you know, different than looking at just their fund track record. So look and see what deals have they offered as co-invest? How have those performed? You know, who are the groups that, you know, characteristically are coming in? Next layer is what's the type of flow? Is it within the buy box of the GP? Are they, you know, following the market that's just gotten larger and need additional capital, but staying within the strike zone of their strategy, that's a really good deal to go and do. So I think that's another thing that is really helpful in analyzing whether you're being adversely selected or how to mitigate against it. Another thing is just being selective. There are strategies where you go and do all the co-investments you're shown that helps kind of disperse your capital. You're mitigating some of the risk and concentration by doubling down in specific deals. But if you're selective and you've built out the capabilities because you're really actively focused on this space and you're underwriting all of the attributes of the deal as well as the manager, you're giving yourself kind of a leg up. Many great lessons there. One is look at their co-invest track record, not just their fund track record. Do they see co-invest as access and additional capital to their best ideas? Or is it the second or third tier deal that they have? We might as well offer us co-invest, you know, no harm, no foul. It doesn't hurt our fund track record. And then two is what is their right to win in their buy box? are they really good at this? If you're typically a seed and pre-seed investor, do you know what a good Series B, Series C, Series D investment looks like? So making sure that the manager can credibly understand and differentiate what a good deal and what a bad deal looks like. On the third point about diversifying, I have Chris Aylman, he was 23 years, the CIO of CalSTRS. He said the only thing that worked for co-investment was rules-based. Picking a rule and heavily diversifying and coincidentally and really not coincidentally they would get roughly the alpha in those deals of the fee layer so if they were paying two and 20 and for CalSTRS they were paying zero and zero they roughly got that 600 basis points that they would have paid in two and 20 on average so if you are truly not adversely select and you're diversified you should get that structural alpha by doing co-investments absolutely and I think that's where kind of the principle came from is you're trying to you know reduce that overall fee drag you know average out at a more appealing space. As you mentioned, if you're doing all of the deals, that's usually where you land up. But if you've built out those resources and you want to go and build out a direct platform, you have the ability to go and be hyper-selective. And granted, there is more dispersion in the outcomes in that instance. And, you know, there is more risk if you're going, you know, in a smaller number of deals. But if you're, you know, backing not only the diligence of your manager, but also your own team, you are increasing the likelihood of success. Is there a place in the market when it comes to co-investments where there's more principal agent alignment versus a blind pool fund? Or is it always at best equal and at worst less aligned? There's a strong case to be made that there is more alignment in a co-investment product. From three key areas, fees, transparency, and selection. From a fee perspective, there is some argument to be made on the other side where GPs are equally incentivized across all of the assets in their fund. If you're involved in a fund, you're getting that. But when it comes to a co-investment deal and you have done your work underwritten the deal feel really strongly, you're now like selecting a high conviction opportunity, and you're aligning the outcome for the GP fully on performance. For the LP, you're benefiting because you're paying likely a lower management fee carry that is lower, perhaps tiered getting up to a higher rate, but generally speaking, lower all in fees. And from the GP side, you're playing for that outperformance because the deal is something you have strong conviction on. So, you know, from my perspective, I think fees is kind of a strong point there, where, you know, there's a case to be made that co-investments are more aligned. From a transparency perspective, if you're underwriting the transaction, you're getting a lot more information. And, you know, what you do with that information, you underwrite, you diligence, then you invest. Maybe that comes with governance, which is kind of another part of kind of this alignment concept where, you know, now that you're involved in the business, maybe you are on the board, maybe you have a board seat, observer, you're a partner in some way because you have prior experience in the space as a family office. But I think that information transparency and access into the company, if you are, you know, that close to it, coupled with some governance does more align every party around the table. And then around selection, I think if you're as an LP selecting you know the highest quality asset and you made your judgment using your underwriting coupled with the GP underwriting you now going into a deal that they presumably have high conviction in So you kind of increased the likelihood there that you know there a strong outcome Granted like we said there some cases to be made on the other side around diversification and consistency around outcomes for the GP and going across a fund. But I think from my perspective, and why I think this market has grown very significantly, is that there is a really strong case, particularly from the LP side of seeing alignment being more equal in a co-investment process. Last time we chatted, you said that there were specific pools of capital being raised to fund co-invest. Tell me about these pools of capital. Who's raising these funds? And how much of a trend do you expect this to continue? On one side, you've got co-investment funds that are part of existing allocators, and they've always kind of had them. We've just seen them get a lot larger. What's interesting and attractive about these is they've been set up to make bigger bets on the winners of the GPs that they're invested in. So you take your fund of funds that have really strong relationships across GPs, and they're seeing really strong deal flow. Those deals have gotten bigger. They're raising bigger pools of co-investment capital. And LPs that don't have the resources or the infrastructure to go and underwrite a co-investment directly, continue to go into these products because it's giving them similar exposure, but with a manager who's kind of doing that underwriting work for them. On the other side, which is, you know, newer, and I think particularly interesting, is seeing co-investment funds that are raised specifically to back independent and emerging managers. So you've got pools of capital that, you know, are replacing a lot of legacy independent sponsor, where it used to be a private equity firm that would take control and, you know, be on the board and really be driving side by side with that independent sponsor, but now are providing a lot of the resources of a private equity firm, but in a minority non-control position. And this is another co-investment fund-like product that investors who are interested in that independent sponsor space but haven't quite built out platforms to go and underwrite them directly are finding really appealing because not only are you getting exposure to an asset class with independent sponsors that has, you know, demonstrated with dispersion but to outperform regular way buyouts, but you're also getting intros into potential future fund relationships because these are managers who are early in their life cycles trying to build that network. And again, the best way to get to know them is to do a deal. So if you can see them through the lens of someone who has the experience of underwriting that transaction, I think that helps clear the bar internally for these programs that are early on in their life cycles. And you're seeing groups that are very established, fund-to-funds and private equity firms like AGM, Ocean Avenue, Headway, Align Collaborate, taking their experience as a fund-to-fund or a private equity firm and replicating it in a product for independent sponsors. This is a good time to talk about economics. what are the independent sponsored deals and the co-investments typically priced at? And then these new pools of capital, these co-invest vehicles, what are they priced at? And what's the blended fee? On the co-investment fund side, a lot of these funds are priced at one in 10. So, you know, you're going into this product, you're probably in the fund as an LP with, you know, take your pick fund of funds. And that's, you know, a two in 20 product, but this co-investment fund alongside of it, probably at one in 10. And the deals that are coming into that are often fee-free because they're with the managers that they're invested in. So they're side by side with a fund of funds. So they're kind of blended to one and a half and 15. Exactly. So you're bringing your overall fee burden down, but still getting that exposure to deals that, you know, in a perfect world will outperform. On the independent sponsor side, you see the deals, and this is the economics that the independent sponsor will charge to any investor is usually around that one in 10, but ratcheting up based on outperforming. So the carry may hit up to 20 to 25%, depending on, you know, hitting a three to four X outcome. And then that management fee, 1% is a baseline. I think oftentimes to, you know, increase the alignment, they often will structure that as a portfolio monitoring fee that the company will pay. So then all the investors are kind of bearing it equally. The reason I've spent a lot of time on continuation vehicles, co-investments and other non-blind pool structures is because every LP that I talk to has this issue of DPI and not wanting to lock up their capital in these blind pool funds. it's a trend that if you're in these conversations, it seems very obvious. And I think it's a trend that hasn't yet proliferated through the industry and more people are not aware of that. Where do you see this industry of non-blind pools and how do you see that evolving in the next five, 10 years? Looking back before looking forward, that's probably what I've been most surprised about is how quickly it's grown. Five, six years ago, granted early on in my time in the space, but I think I thought of co-investments as something big GPs offered to their LPs as a way to incentivize them to come into funds, help them reduce their fee burdens. And then you start seeing it expand very naturally into independent sponsors. It's a very similar model. You see a similar approach from an LP perspective when they think about co-investments and secondaries, talking to folks in venture who use this model. And then on the LP side, just a number of groups that have gone from doing this very passively to actively focusing on increasing exposure to co-investments, independent sponsors, single asset CVs. I think you've got a really good market backdrop for this to continue growing. So, you know, what does this look like in five to 10 years? That's why I'm in this business. I think it's extremely exciting. And I think that the quality of deals continues to grow. I think you start seeing a lot of managers who historically have raised funds and have kind of hit pause because the market is challenging right now for blind pool fundraising. So, you know, admits that there are still good deals. So they've gone and raised co-investment on a standalone basis, using groups like LAS to introduce them to new third-party investors. And I think you start seeing the quality of the groups pursuing this model as a standalone strategy continues to grow and the number of groups continuing to grow. And then from the LP perspective, I think this is fully a changed conversation at this point where it's no longer a nice to have as part of a long term relationship through a fund. It's almost a need to have and also something that you're looking at as a standalone investment strategy that really should be the next kind of pocket of alpha for your portfolio. I love how you answered my question, which I asked you, what do you imagine in five to 10 years? And your answer was, well, look at the last year and extrapolate it out, which is what any great investor would do, which is, where are we today? Well, if it's growing at this pace, will that growth continue? But if you could go back to when you just started as an analyst at Citi, what is one piece of advice you'd give a younger Rohan that would have either accelerated your career or helped you avoid cost and mistakes? I went to undergraduate business school. The mindset was, you're going to be an investment banker. And that's what was really pushed from upperclassmen, friends, people who I met. So you're going to go do that. And I really enjoyed it. I think it was a really good foundation because you learn a lot about the industry and you learn how to interact with people across a bank and how a deal comes together. One thing that's really important, if I was talking to my younger self, was don't close off what you're open to too early. I've always been someone that wanted to be very market facing and wanted to be interacting with investors who are putting capital to work. As I grew at Citi, and this was advice I got while I was there, was talk to everybody. You learn so much about what this industry has. Getting to see that there is a business like this, where you get to work with the most experienced and successful private equity funds, going in, transforming the way they invest. And on the other side, being the voice of that capital that's going into these products and going connecting these parties is something that had I not been open to every conversation, I wouldn't have ever found out about. I've actually changed my mind on this recently, which I used to be extremely focused on just working on the thing that I'm working on, just basically going into monk mode and just, just executing. And I've learned this from a lot of top LPs and also GPs. There's a lot of value and a lot of information you could get from the first meeting. So the way to distill this is take the first meeting, because you want to know who you want to take 100 meetings with. So if you think that the cost of a relationship or the cost of any commitment is 100 meetings at a minimum, then it becomes really efficient to take five, six, seven first meetings in order to ascertain who you should do the 100 meetings with. So I've actually changed my mind on that quite recently. I agree. I think expanding the aperture of what you spend time on just like improves you at what you're trying to focus on, because you think of it from different perspectives. And I think you can always take something from a conversation. And that's the way we approach kind of marketing is you might take a deal to an LP that loosely has told us it's something that they're interested in, but the start of a relationship because that deal doesn't fit. Well, Rohan, this has been an absolute masterclass. Thanks so much for jumping on. Thanks so much for having me. It's been great to chat.