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A club deal, in finance, refers to a leveraged buyout or other private equity investment that involves several different private equity investment firms. Club deal can also be referred as syndicated investment.

In a club deal, the investor group of private equity firms pools its assets together and makes the acquisition collectively. The practice has historically allowed private equity to purchase larger and more expensive companies than each constituent firm could potentially acquire through its own private equity funds. Additionally, by syndicating the equity ownership across a group of investment firms, each firm reduces its concentration and is able to maintain the diversification of its portfolio of investments.

Institutional investors that invest as limited partners in private equity funds often criticize the practice of club deals that result in holdings in the same investment through different funds. Large limited partners have often preferred to support large leveraged buyouts through equity co-investments alongside the leading financial sponsor.[1]

Examples

Among the most notable of the large club deals completed were the following:

See also

References

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