Co-investment rights offer investors opportunities to participate in certain investments to the extent that the manager elects not to pursue those investments entirely in its commingled fund. Historically, co-investments have been the province of private equity funds, managers and investors. As the range of hedge fund investment strategies has grown to incorporate less-liquid assets, however, the relevance and use of co-investments has grown as well. In the first article in this three-part series, we discuss key reasons why hedge fund managers offer co-investments; identify the categories of investors that typically pursue co-investment opportunities and the reasons for their interest; and discuss the investment strategies that lend themselves to co-investments. The second article describes how co-investments are commonly structured and discusses their key terms, such as management fee rates, incentive compensation and liquidity considerations. The third article analyzes fiduciary duty considerations that may arise when allocating investment opportunities between the main fund and co-investors, and identifies five common conflicts of interest associated with co-investments. For more on co-investments, see “Private Equity in 2017: How to Seize Upon Rising Opportunity While Minimizing Compliance and Market Risk” (Jun. 8, 2017); and “Sadis & Goldberg Seminar Highlights the Ample Fundraising and Co-Investment Opportunities in the Private Equity Industry, Along With Attendant Deal Flow and Fee Structure Issues” (Dec. 8, 2016).