Topic hub
Fund structures
Fund structure is the legal, tax, liquidity and economic architecture of an investment fund. This hub covers the legal forms private funds use, the difference between closed-end and open-end vehicles, the related entities that sit around a main fund, and vehicles built for a single investor or a single deal.
Sections start with the parties to a limited partnership: the general partner, the limited partners and the management company. They continue with closed-end, open-end and evergreen funds; multi-entity structures such as master-feeder and parallel funds; investor- and deal-specific vehicles such as the separately managed account and the SPV; liquidity terms; fund-level borrowing; and vehicles defined by a specific regulatory regime.
Not in this hub: the economic terms inside a fund, which are in Fund terms and economics, and the full regulatory treatment of each vehicle, which is in Legal, regulatory and tax.
Reference index
Definition:
Parties and legal form
5 concepts- Limited Partnership (LP)
A limited partnership (LP) is a statutory partnership with at least one general partner, which manages it and is liable without limit for its debts, and at least one limited partner, whose liability is capped at its contribution.
- General Partner
- Limited Partner
- Fund Manager
- Emerging Manager
An emerging manager is an investment firm that an allocator's programme classifies as early in its institutional life, usually by fund number, firm assets or fund size; definitions and thresholds differ by allocator and asset class.
Closed-end, open-end and evergreen funds
4 concepts- Closed-End Fund
- Open-End Fund
An open-end fund is a fund that issues interests investors can require it to redeem at or near net asset value, so its capital rises and falls with subscriptions and redemptions rather than being fixed at a closing.
- Evergreen Fund
- Interval Fund
An interval fund is a US closed-end fund registered under the Investment Company Act that gives shareholders liquidity through periodic offers to repurchase a stated portion of its shares, made under Securities and Exchange Commission (SEC) Rule 23c-3.
Investor- and deal-specific vehicles
3 concepts- Special Purpose Vehicle
- Co-Investment
A co-investment is a minority equity investment made directly in a specific portfolio company alongside a private fund sponsor's main fund, typically offered to the fund's LPs or other partners on reduced or no management fee and carried interest.
- Fund of Funds
Liquidity terms
3 conceptsFund-level borrowing
2 concepts- Subscription Line of Credit
A subscription line of credit is a revolving loan to a private fund secured on its investors' uncalled capital commitments and the fund's right to call them, used to fund investments and expenses before, or instead of, calling capital.
- NAV Lending (NAV Facility)
NAV lending is lending to a private fund, or to a vehicle that holds its investments, secured on the net asset value of the fund's existing portfolio rather than on investors' uncalled commitments.