Co-Investments in Late-Stage Private Markets
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Over the past decade, the private investment landscape has undergone a profound transformation. Companies are staying private longer, on average, 12 years compared to four to five years in the early 2000s, capturing significant growth before entering public markets. This extended lifecycle has shifted much of the value creation away from Wall Street and into the hands of private market investors.
One of the most compelling areas within this shift is late-stage private investing. Companies that are not early-stage startups chasing product-market fit, but businesses with proven business models, meaningful revenue, and clear paths to Initial Public Offerings (IPOs) or strategic exits. Many have already established competitive moats, generated positive cash flows, and are well-recognized by public market investors despite not yet being publicly traded. Think of companies like SpaceX and OpenAI, household names that are still private, yet central to some of the most important technological shifts of our time.
What sets up late-stage private companies apart is their position in the capital markets. They combine innovation and growth potential of private ventures with the operational maturity of public companies. According to PitchBook, more than 70% of late-stage VC-backed companies in 2024 reported annual revenues exceeding $50 million, with a growing number surpassing $100 million. These firms often serve Fortune 500 clients, have scaled their infrastructure, and are actively preparing for public listings. Many latest venture surveys claim that more than 60% of such companies are expected to IPO within 12 to 36 months. For investors, this translates into a rare blend of growth, visibility, and defined liquidity timelines.
At Tolleson, we have invested in some of these late stage mature companies through our co-investment platform. Co-investing allows our clients to participate directly in many such high-conviction opportunities alongside leading General Partners (GPs).
This approach is particularly well-suited to late-stage investing, where timing, transparency, and selectivity are critical. Through co-investments, Tolleson clients benefit from:
- Lower fees: Typically, the underlying manager does not charge a management fee and low carried interest, enhancing net returns.
- Accelerated deployment: Capital is typically deployed within two to six weeks, enabling timely access to fast-moving opportunities.
- Enhanced transparency: Direct access to company-level diligence improves decision-making.
- Strategic partnerships: Tolleson’s relationships with top-tier GPs unlock deal flow and early access.
This model is not just about access; it’s about alignment. Our Investment Team works closely with sponsors to identify opportunities that match our clients’ long-term goals, risk tolerance, and thematic interests. These investments often occur at a pivotal stage, before entering public markets, providing Tolleson clients with exposure to innovation that’s typically unavailable through traditional investment vehicles.
Tolleson’s decades of private market experience, strong GP partner network, and disciplined investment process allow us to invest early and selectively in innovation, which supports the goal of making a meaningful impact in client portfolios.
General Performance Information: The performance results in this presentation have been compiled by Tolleson Wealth Management (“TWM”). Past performance is no guarantee of future results. No representation is being made that any account will or is likely to achieve profits or losses. All investments involve risk, including the loss of principal. A client’s return will be reduced by the advisory fees and other expenses. TWM’s advisory fees are described in Part 2a of our Form ADV. This information discusses general market activity, industry or sector trends, or other broad-based economic market or political conditions and should not be construed as research or investment advice. Certain information contained herein concerning economic trends and performance is based on or derived from information provided by independent third-party sources. Opinions expressed are current opinions as of the original publication date appearing in this material only. Any opinions expressed are subject to change without notice and TWM is under no obligation to update the information contained herein. TWM disclaims responsibility for the accuracy or completeness of this report although reasonable care has been taken to assure the accuracy of the data contained herein. This material has been prepared and is distributed solely for informational purposes only and is not a solicitation or an offer to buy a security or instrument or to participate in any trading strategy. This report may not be reproduced, distributed or transmitted, in whole or part, by any means, without written permission from TWM. If you have any questions regarding this presentation, please contact your TWM representative.
Unregistered Private Funds: Any client who subscribes, or proposes to subscribe for an investment in any private fund must be able to bear the risks involved and must meet the fund’s suitability requirements. Before making an investment in a private fund or partnership, potential investors should carefully read the applicable Private Offering Memorandum and Subscription Application and consult their professional advisor as an investment in a private fund is speculative, not suitable for all clients, and is intended for experienced and sophisticated investors who are willing to bear the high risks of such an investment. No assurance can be given that the fund’s investment objectives will be achieved. Private fund investments are typically speculative and involve a substantial degree of risk. The private fund may be leveraged and engage in other speculative investment practices that may increase the risk of investment loss. An investor must realize that he or she could lose all or a substantial amount of his or her investment in the fund. Private fund investments are generally highly illiquid. Private equity funds do not allow additional subscriptions or withdrawals. Cash will be distributed once the underlying fund managers begin to liquidate their investment holdings and send cash to the private equity funds. This material is for informational purposes only and is not an offer to sell or solicitation of any offer to buy shares or interests in the funds. Such offer or solicitation will be made only through the applicable Private Offering Memorandum and Subscription Application, and is qualified in its entirety by the terms and conditions contained in such documents. Each Private Offering Memorandum contains additional information need to evaluate an investment in a fund and provides important disclosures, including but not limited to, disclosure regarding risk, fees and expenses. Transactions of the type described herein may involve a high degree of risk, and the value of such instruments may be highly volatile. Such risks may include, but are not limited to, risk of adverse or unanticipated markets developments, risk of counterparty or issuer default, risk of illiquidity as there is generally no secondary market for an investor’s interests in a non-registered private fund and none should be expected to develop, and loss of all or substantial portion of the investment due to leveraging, short-selling and investing in speculative securities. Additionally, the private fund referred to in this presentation is not subject to the same regulatory requirements as a mutual fund, including the SEC’s registration and disclosure requirements. The private fund has not been and will not be, registered under the U.S. Securities Act of 1933 as amended, the securities laws of any other state or the securities laws of any other jurisdiction, nor is such registration contemplated. For further information regarding the risk factors and conflicts of interest with respect to the private fund in which you propose to invest or currently invest, please refer to the fund’s offering memoranda and subscription documents.