CF Private Equity Closes Fifth Co-Investment Fund at $187 Million

In a market where private equity fundraising has faced headwinds for three consecutive years, CF Private Equity has bucked the trend. The Norwalk, Connecticut-based firm announced today that its fifth dedicated co-investment vehicle closed at $187 million, exceeding its $175 million target—a notable achievement that underscores the growing institutional appetite for direct deal participation alongside established general partners.

The fund, formally known as CF Private Equity Co-Investment Opportunities V, L.P. (CCO V), held its final closing on January 12, 2026, drawing capital commitments from existing investors through prior vintages, as well as new institutional limited partners from pensions, endowments, foundations, family offices and sophisticated clients of registered investment advisors.

The successful close reflects a broader shift in how sophisticated institutional investors are approaching private equity allocations. Co-investments—where limited partners invest directly alongside fund managers in specific portfolio companies—have emerged as an increasingly attractive alternative to traditional commingled fund structures.

The appeal is multifaceted. Co-investments allow investors to invest directly alongside private equity funds, providing greater transparency, control, and potential for higher returns, according to industry research. Perhaps most compellingly in today's environment, a large allocation to co-investments in a portfolio can help drive down the overall costs to end investors.

This fee advantage has become particularly salient as institutional investors face mounting pressure to justify private equity allocations amid public market alternatives. By bypassing the traditional "2 and 20" fee structure on co-invested capital, investors can meaningfully enhance net returns—a critical consideration when private equity fundraising remained tough, down 24 percent year over year for traditional commingled vehicles, marking the third consecutive year of decline.

CF Private Equity's ability to exceed its fundraising target speaks to the firm's established track record and the strength of its limited partner relationships. Mark Hoeing, President and CEO of CF Private Equity, noted that "this result further reinforces the strength of our LP relationships and unique investment approach", emphasizing the continued support from the firm's investor base.

The firm's pedigree runs deep. Since 1988, CF Private Equity has empowered pension funds, endowments, foundations, family offices, investment advisors, and other sophisticated investors, building a 35-year track record in private capital markets. This longevity has enabled the firm to cultivate the extensive general partner relationships that form the foundation of its co-investment strategy.

The CCO V fundraise represents the latest milestone in a growing franchise. The firm's third co-investment fund, CCO III, closed at $160 million, beating its $150 million target back in August 2021. The consistent pattern of exceeding targets across multiple vintage years demonstrates both investor confidence and the firm's disciplined approach to capital raising.

Notably, CF Private Equity has built a diversified platform beyond co-investments. The firm recently closed its fourth secondaries fund at a substantial $1.1 billion, significantly exceeding its $750 million target—further evidence of institutional demand for alternative private equity strategies that offer enhanced liquidity and fee efficiency.

The investment mandate for CCO V maintains consistency with the firm's established approach while offering flexibility to capitalize on emerging opportunities. The fund intends to leverage CF Private Equity's extensive relationships with private equity managers and sponsors to identify opportunities, investing in companies across two to three vintage years, focusing on small and middle market growth equity and buyout opportunities.

This middle market focus positions the fund squarely in a segment that has demonstrated resilience even as mega-deal activity has fluctuated. While the private equity market globally saw $1.5 trillion in investment in the first three quarters of 2025, much of this activity has been concentrated in large-cap transactions. The middle market, by contrast, offers a broader universe of opportunities where operational value creation—rather than financial engineering—drives returns.

Geographically, the fund plans to be geographically opportunistic, though it is expected to tilt toward more developed economies such as the U.S. and Europe. This approach balances the pursuit of attractive risk-adjusted returns with the practical realities of deal sourcing, due diligence, and portfolio monitoring across CF Private Equity's established GP network.

The two-to-three vintage year investment period provides the fund with flexibility to deploy capital thoughtfully rather than rushing to put money to work—a critical advantage in an environment where valuation discipline remains paramount.

CF Private Equity's fundraising success stands in stark contrast to the broader challenges facing the private equity industry. The market has been grappling with a confluence of headwinds: elevated interest rates that have complicated deal financing, valuation gaps between buyers and sellers, and a distribution drought that has left many limited partners overallocated to private equity.

Yet within this challenging landscape, pockets of opportunity have emerged. After two years of murky conditions, private equity started to emerge from the fog in 2024, with the long-awaited uptick in distributions finally arriving—for the first time since 2015, sponsors' distributions to LPs exceeded capital contributions.

This improvement in distributions has been particularly important for institutional investors who have been starved for liquidity. The return of capital has enabled LPs to rebalance portfolios and selectively commit to new funds—particularly those, like CF Private Equity's co-investment vehicles, that offer differentiated value propositions.

The co-investment market has benefited from another secular trend: the increasing sophistication of institutional investors. As LP investment teams have grown in size and capability, many have developed the internal resources necessary to evaluate and monitor direct co-investments. This has expanded the addressable market for dedicated co-investment funds like CCO V, which provide access to deal flow without requiring the extensive internal infrastructure of a full-fledged direct investment program.

CF Private Equity operates as an affiliate of Commonfund, a broader asset management platform that has served nonprofit institutions since its founding. This affiliation provides several strategic advantages that differentiate the firm in a crowded co-investment landscape.

First, Commonfund's deep roots in the endowment and foundation community provide natural alignment with the long-term investment horizons that characterize successful private equity investing. These institutional relationships, cultivated over decades, create a stable and sophisticated LP base that understands the illiquidity premium and can commit capital through market cycles.

Second, the broader Commonfund platform offers complementary investment capabilities that can enhance the value proposition for limited partners seeking comprehensive private markets exposure. Beyond co-investments and secondaries, the platform provides access to primary fund commitments and other alternative strategies—enabling LPs to construct diversified private equity portfolios through a single relationship.

With $187 million of committed capital, CF Private Equity now faces the critical task of deployment. The firm's investment period of two to three vintage years provides flexibility, but the market environment will demand selectivity and discipline.

Several factors will shape the opportunity set. Middle market deal activity has remained relatively robust compared to mega-deals, as private equity sponsors focus on operational value creation and strategic add-on acquisitions. The small and middle market segments that CCO V targets have historically offered more attractive entry valuations and greater opportunities for hands-on value creation.

Growth equity opportunities, in particular, may prove attractive in the current environment. As venture capital-backed companies face pressure to demonstrate paths to profitability, growth equity capital from established private equity sponsors can provide both funding and operational expertise—creating compelling co-investment opportunities for vehicles like CCO V.

The fund's geographic focus on developed markets, particularly the U.S. and Europe, positions it to benefit from several tailwinds. The U.S. market, despite ongoing economic uncertainties, has demonstrated remarkable resilience, with deal activity showing signs of recovery. European markets, meanwhile, may offer valuation opportunities as regional economic challenges create dislocation.

CF Private Equity's successful fundraise carries implications beyond the firm itself. It demonstrates that institutional investors remain willing to commit capital to private equity strategies that offer clear value propositions—even in a challenging fundraising environment.

The co-investment model's appeal is likely to endure. As fee pressure intensifies and investors demand greater transparency, the ability to invest directly alongside proven managers at reduced fee loads will remain attractive. This suggests continued growth in dedicated co-investment vehicles, though success will increasingly depend on differentiated access to high-quality deal flow.

For general partners, the rise of co-investment funds like CCO V represents both opportunity and challenge. On one hand, offering co-investment opportunities can strengthen LP relationships and facilitate fundraising for flagship funds. On the other, it requires careful management of capacity allocation and potential conflicts of interest.

The market is also seeing innovation in co-investment structures. Some firms are experimenting with programmatic co-investment arrangements, while others are developing sector-specific or strategy-specific co-investment vehicles. CF Private Equity's broad mandate across growth equity and buyouts in the small and middle market provides diversification while maintaining focus on the firm's core competencies.

In an environment where private equity fundraising has faced sustained headwinds, CF Private Equity's ability to close its fifth co-investment fund above target stands as a testament to both the firm's track record and the enduring appeal of the co-investment model. The $187 million CCO V fund represents more than just a successful capital raise—it reflects the evolution of institutional private equity investing toward greater fee efficiency, transparency, and selectivity.

As the fund begins its deployment phase, its performance will be closely watched by the broader LP community. Success will depend on CF Private Equity's ability to leverage its extensive GP relationships to source attractive middle market opportunities, maintain valuation discipline in a competitive environment, and deliver the enhanced returns that make co-investments compelling.

For institutional investors navigating an increasingly complex private equity landscape, vehicles like CCO V offer a path to maintain exposure while addressing concerns around fees, transparency, and portfolio construction. As the private equity industry continues to mature and evolve, co-investment strategies are likely to play an increasingly central role in how sophisticated institutions access private markets.