Abstract: A co-investment structure that aligns interests among investors and investment managers by creating pure performance based compensation for the investment manager while overcoming the conundrum facing asset allocators in selecting investment managers. The co-investment structure provides cash-based evaluation of performance and offers multi-option hurdle rate alternatives that accommodate the performance benchmarks of major asset classes while establishing a compensation structure using granular stratification of relative performance. The co-investment structure bases investment manager compensation solely on excess profits, actually cultivating entrepreneurial returns. In particular, the best entrepreneurial investment managers, singularly focused on achieving excess profit with respect to a top quartile benchmark, excel with the co-investment structure.