Real Estate Co-Investment: What Participants Are Saying

May 27, 2026

By William Maher, Director of Strategy and Research, RFA; Nolan Eyre, Research Associate, RFA

Co-investment, also known as “sidecar” investment, in commingled real estate funds has become an increasingly popular strategy that investors use to make project specific investments, often at lower fees than investments in the fund itself. Co-investment can lead to greater control over property type allocation and risk levels.  Co-investment typically does not provide additional control over financing and disposition.  Despite growing popularity, there is little data or organized information about this strategy.

RCLCO Fund Advisors (RFA) conducted parallel surveys of institutional real estate investors and fund managers to capture how co-investments are experienced and valued. Together, the two surveys offer a view of where expectations align, where they diverge, and what that gap means for how co-investment programs are structured and negotiated. The investor survey focuses on participation history, portfolio sizing, fee expectations, evaluation process, and future intentions. The manager survey examines motivations, program design, fee norms, access policies, and outlook. The survey was offered to a wide range of institutional investors and real estate investment managers.

Some of the key highlights include:

• Investors indicated that co-investment is a widely used but unevenly valued feature of institutional real estate portfolios. Participation is high, but only half of prior participants described the experience as positive.
• The overall trajectory for investors is flat to declining. A third of respondents indicated that they will reduce future co-investment commitments, while only 16% plan to increase commitments.
• Seventy-nine percent of managers that responded have offered co-investments. Of those offering co-investments, 95% called it a positive experience.
• The outlook for manager participation is stable to growing, with only a small minority expecting to pull back.
• Only half of the investor respondents considered prior co-investments to be a positive experience, while 20% indicated that prior co-investment was negative.
• Managers and the industry as a whole need to do a better job in showing that co-investment improves risk adjusted returns.
• The range of fee structures needs to be streamlined and more in line with the overall private equity industry.
• RFA will continue this survey on a biannual basis in order to provide transparency to both groups and to track trends and results.