Morgan Stanley Investment Management has reached the $2.3bn hard cap for its third co-investment fund, North Haven Private Equity Co-Investment Opportunities Fund III (PECO III), signalling sustained investor appetite for differentiated private equity exposure.

The fund, managed by Morgan Stanley Private Equity Solutions, will target co-investments alongside top-tier buyout managers, primarily within the lower middle market. PECO III continues a successful lineage of co-investment vehicles, following the firm’s prior PECO I and PECO II funds. Collectively, Morgan Stanley has committed nearly $6bn to co-investments over a 25-year span.

Neha Champaneria Markle, Head of Morgan Stanley Private Equity Solutions, noted that the fund’s success is rooted in long-standing GP relationships and disciplined execution. “We look forward to continuing to broadly support GPs whether as a limited partner, as a co-underwriting partner, as a warehouse provider, or as a financing source,” she said.

The strategy forms part of Morgan Stanley’s $240bn alternatives platform, which spans fund-of-funds, secondaries, custom mandates, and venture strategies. With over $27bn committed across more than 1,200 private markets investments, the group ranks among the most experienced multi-manager platforms globally.

David N. Miller, Global Head of Morgan Stanley Private Credit & Equity, added that the team’s ability to source and execute attractive co-investment opportunities “consistently delivers value” to investors, leveraging the firm’s global platform.

The oversubscribed fund demonstrates continued demand for co-investments offering direct exposure to private equity transactions, particularly in segments of the market where access is often limited.

Source: BusinessWire