Changes

Before considering carried interest, one must first have a basic understanding of the organizations that currently benefit from it. Private investment funds, set up as limited liability companies or limited partnerships, invest capital in or acquire private or publicly traded companies. These funds are organized under general partners and limited partners. The general partners are the funds' managers or managing firms. The limited partners are the funds' investors who typically include pension funds, insurance companies, and wealthy individuals. Types of private investment funds include private equity funds, hedge venture capital funds, and venture capital hedge funds.

*Private equity funds generally invest in large companies, by acquiring private firms or purchasing a controlling interest in publicly traded ones, with the intent to restructure and sell the firms for a gain. The acquisitions performed by These investments usually entail the acquisition of private companies, but they may also involve acquiring controlling interests in public companies through stock purchases. Private equity funds usually employ a long-term, hands-on approach to investment. *Hedge funds, alternatively, focus on achieving high returns through risky, short-term investments that may come in the form of stocks, bonds, commodities, derivatives, and anything else that promises a quick gain. Accordingly, hedge funds do not adopt the same hands-on approach to investment that