By Eshana Lutawan, Marketing Manager at HF Quarters
Large private-market deals are increasingly built with partners of all sizes. Nine of the top ten largest sovereign wealth fund deals in 2025 were co-investments with private equity firms. SWFs are not only allocating to managers, but they are also often investing alongside them in specific transactions. And the trend is expected to continue in 2026 with an increased allocation to private equity.
For family offices and HNWIs that are already operating in private equity and for which it is a meaningful part of their portfolios, the trend could lead to more opportunities to participate in larger deals. Alternative investments represented 44% of the average strategic asset allocation of family offices, with private equity at 21%. Family offices are also expected to raise their allocations to this segment.
For fund managers, this can change the rhythm of execution. Co-investment structures can introduce an extra layer of coordination around timelines, information flow, and governance, simply because more parties are underwriting the same asset. Managers may need to adapt their processes to accommodate additional reporting requirements and approval cycles for multiple sophisticated investors.
At the same time, increased activity of capital allocators could create a boon of opportunities for fund managers of all sizes. Firms that can demonstrate flexibility, transparency, and operational rigor are likely to attract repeat co-investment partners, potentially enhancing fundraising prospects and long-term credibility in the increasingly interconnected private-market ecosystem.