Investment Management

Investment Fund/Private Equity Fund

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What is investment fund and private equity fund formation?

Private equity fund formation involves the creation of a private equity investment fund. Often, a limited partnership is formed in the state of Delaware or the Cayman Islands. A General Partner is formed, and private investors who wish to subscribe to the fund are identified. The fund then purchases investments in a variety of private enterprises.

How are investment funds structured?

Investment funds are structured differently depending on where they are formed and the nature of the investments they make. Hedge fund and private equity fund formation typically involves the creation of a limited partnership with an affiliate of the investment manager serving as the general partner of the fund.

What does a fund formation attorney do?

Fund formation law firms and fund formation attorneys handle all of the legal back-end of private equity fund formation and hedge fund formation. They draft the offering documents and partnership agreements that form the backbone of the funds. They also provide regulatory and compliance advice to ensure compliance with applicable legislation and regulation. This is true for formations ranging from venture capital fund formation to real estate and private equity fund formation.

How do you create a private equity fund?

A private equity fund is typically formed by a sponsor that has a unique investment strategy and access to investors who are willing to invest substantial sums of money into private enterprises. After the creation of a limited partnership and execution of subscription agreements and the partnership agreement, the fund would begin to invest in private firms. Of course, in real life it’s substantially more complex than that and you would require a great deal of legal and professional advice.

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