What aspect does syndication primarily address in private equity?

Syndication primarily addresses risk and return sharing among investors in private equity. When multiple investors come together to participate in a large investment, they share both the financial risk and the potential returns associated with that investment. This collaborative approach allows each investor to commit a smaller amount of capital while still gaining access to larger deals that might otherwise be too risky or costly for an individual investor to handle alone. By pooling resources, investors can diversify their portfolios, mitigate individual exposure, and enhance their ability to achieve favorable returns across a range of investments.

The collaborative nature of syndication also creates opportunities for sharing expertise and fostering better decision-making processes, as various stakeholders bring different strengths and insights to the table. While other options may touch on aspects related to syndication, such as cost reduction or increasing the number of investments, they do not capture the fundamental principle of risk-sharing that is central to the concept of syndication in private equity.