How do co-investments and direct deals fit into portfolio diligence?
Updated
Co-investments and direct deals sit at the deal level, outside the commingled fund, but they belong to the same investor portfolio. Portfolio diligence reads them alongside fund commitments on look-through, so the same asset, manager or risk reached through more than one route is seen once, not missed or counted twice.
Many investors now hold fund commitments, vehicles, co-investments and direct deals at the same time, often with the same managers. Each is diligenced on its own terms. The portfolio level is where they meet: an investor's total holdings across every manager, fund and direct deal.
In Reuben AI each holding is a linked record across the six levels, so a co-investment carries its own deal findings and its link to the lead manager's fund. Overlap, concentration and evidence gaps can then be read across the whole portfolio, while judgement on what to do about them stays with the team.
How Reuben AI compares
How each route into an asset appears in portfolio diligence.
| Attribute | Reuben AI | Direct deal | Fund commitment |
|---|---|---|---|
| Who chooses the asset | Co-investment: the investor, alongside a lead manager | The investor | The manager |
| Diligence the investor runs | Deal and asset, checking the lead's work | Full asset and deal diligence | Fund and manager, holdings on look-through |
| Portfolio question | Does this add to exposure already held through the fund | How does this sit against everything else | What does the fund actually own |
Frequently asked questions
What is a co-investment?
A minority investment made directly into a deal alongside a lead manager, usually outside the manager's commingled fund and often on different fee terms.
How is a direct deal different from a co-investment?
In a direct deal the investor leads or acts alone. In a co-investment a manager leads the transaction and the investor participates alongside it.
Why do co-investments create overlap risk?
The same asset may already be held through the lead manager's fund, so the investor's real exposure is the sum of both positions.
Can Reuben AI show overlap across routes?
Yes, where holdings are recorded: linked records let the same underlying asset reached through a fund, a vehicle and a co-investment be read together.
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Reuben AI. (2026). How do co-investments and direct deals fit into portfolio diligence?. Reuben AI. Retrieved 25 October 2026, from https://www.goreuben.com/answers/co-investments-and-direct-deals-in-portfolio-diligence - Plain text
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