Insights & Perspectives

• Managers and investors share risks and rewards in every decision.
• Managers’ income depends on actual investment performance.
• Investors gain access to opportunities that would not normally be available to them.
• KBIS Capital follows the industry trend of prioritizing co-investment, downside protection, and operational quality.

Real estate investment has evolved toward structures where managers and investors share both risk and returns, fostering a more transparent relationship aligned with long-term objectives under a model known as aligned capital.

This approach responds to a growing demand for structures that prioritize actual performance over asset volume, ensuring that managers invest alongside their clients and share the outcomes of every decision.

In today’s competitive real estate markets, the advantage lies not only in access to capital, but in how that capital is structured and deployed.

Within this context, interest in co-investment models continues to grow, as these models encourage stronger alignment between managers and investors.

Co-investments allow investors to access exclusive markets and opportunities, share risks with managers, increase capital flexibility, and in many cases, benefit from reduced fees.

KBIS Capital, a boutique firm that connects private capital with institutional real estate opportunities in the United States, bases its strategy on the aligned capital philosophy.

“The concept of aligned capital means that all participants earn the same benefits for the same reasons: managers, operators, and investors,” says Luis Yanes, CEO of the real estate investment manager and capital allocator KBIS Capital. “We only succeed if our investors succeed.”

The goal is to align interests by sharing profits and risks with investors through co-investments in US real estate portfolios that would normally be out of reach for most individuals.

In addition, the firm’s income depends on real investment performance, not on the size of the assets it manages. KBIS prioritizes investor satisfaction and avoids any structure that would allow a sponsor to extract more value than it actually generates.

“If a manager can earn more by increasing assets under management (AUM) instead of generating returns, that creates a conflict.We avoid models that charge fees even when investors lose money,” Yanes explains. “If an operator or sponsor tries to keep a larger share than what they truly create, we simply do not participate.”

According to a report published by EY, co-investments allow investors to participate directly alongside private equity funds, offering greater transparency, control, and the possibility of higher returns.

They also allow investors to support specific transactions selected by managers, with better visibility and access to exclusive opportunities. “For this reason, investors such as family offices have opted to partner directly with private equity managers and general partners (GPs) and invest with them in individual deals,” the EY document notes.

Mercer identifies five common approaches to implementing co-investments in private markets.

The first is to manage them internally with an in-house team, while a second model combines internal management with support from an external adviser.

It is also possible to invest through a third-party co-investment fund, which reduces administrative burden, or to create a separately managed account or bespoke fund, aligning the strategy with the investor’s objectives while maintaining a degree of control.

Investors can also participate in sidecar vehicles alongside the main fund, obtaining additional allocations with “advantageous fees,” although investment decisions remain under the manager’s control, Mercer explains.

Industry Trends Are Shifting

This trend reflects a deeper shift in the industry:value is no longer measured solely in returns, but in the ability to build relationships based on shared purpose and disciplined risk management.

KBIS Capital sees the industry entering an“accountability era,” in which investors seek structures where fees are aligned with outcomes.

Within this framework, an increase in co-investment models, downside protection structures, and smarter reinvestment policies is expected, along with a stronger emphasis on operational quality over asset quantity.

Investors are seeking strategic partners that provide real operational value, and those who adopt results-driven approaches will hold a competitive advantage in this new market cycle, according to the KBIS CapitalCEO.

A report by private equity firm Adams Street Partners indicates that 88 percent of institutional investors plan to increase their participation in co-investments globally, allocating up to 20 percent of their capital to this more direct and efficient strategy for accessing private markets.

JP Morgan Asset Management explains that fund managers often seek co-investors, generally among their limited partners, for high-conviction investment opportunities. It recommends that co-investors choose managers with a proven track record in the sectors where they invest anda clear value creation strategy.

According to JP Morgan Asset Management, investors seeking access to high-quality deals need an experienced partner with deep market knowledge and efficient due diligence processes. This approach helps ensure that investment decisions are well-founded, especially in concentrated co-investments involving a single company.

KBIS acts as a strategic partner that opens the door to high-quality, low-risk, and attractive real estate investments in the UnitedStates, especially for those without direct access to such markets.

The firm integrates institutional investment standards with the flexibility of a boutique, offering high-quality, risk-controlled real estate portfolios.

The KBIS Capital Model

By co-investing in all its funds, KBIS Capital ensures aligned interests, institutional-grade risk assessment, transparent information flow, and strategies focused on capital preservation and sustainable returns. “Aligned capital is a discipline, not a slogan: we choose terms, partners, and projects that keep incentives aligned from day one,” theCEO notes.

KBIS Capital operates as an external real estate CIO, providing portfolio design, market analysis, tailored solutions, and long-term wealth planning support, not just capital deployment.

One example is a multifamily project in the southeastern United States.

The partner brought a land opportunity with a very tight timeline. In a traditional structure, capital would have required high fees from the outset, incentivizing the sponsor to prioritize speed over quality.

KBIS helped structure the investment differently: its hared the risk by investing alongside the sponsor and established that its benefits would only activate after investors achieved their returns.

Clear controls were implemented regarding budget, financing, and project performance.

As a result, the sponsor focused on execution quality, investors will benefit first, and the project is set to be completed ahead of schedule, demonstrating how the KBIS alignment model works.

KBIS Capital’s current portfolios provide investors exposure to 14,800 units and 55 multifamily properties across 12 US states. In addition to the portfolio’s strength, the firm counts on more than 50 years of combined experience from its principals.

“We give you access to tangible assets you can understand, trust, and feel proud of, while minimizing risk through disciplined diversification and rigorous selection,” KBIS Capital states. Connect with KBISCapital and discover how its aligned approach can strengthen your investments.

Sources:‍

https://www.adamsstreetpartners.com/insights/2025-global-investor-survey/

https://www.ey.com/en_lu/insights/private-equity/co-investment--a-promising-alternative-to-traditional-private-eq

https://am.jpmorgan.com/us/en/asset-management/adv/insights/portfolio-insights/alternatives/the-growing-opportunity-in-private-equity-secondaries-and-co-investments/

https://www.mercer.com/en-fi/solutions/investments/alternatives/co-investments/