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Carried Interest Debate (Wiki Page) (view source)
Revision as of 15:52, 7 June 2016
, 15:52, 7 June 2016→What is a Private Investment Fund?
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==What is a Private Investment Fund?==
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 companiesorder to attain returns for investors. 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 consist of private equity funds, venture capital funds, and hedge funds.
In reality, the lines between these types of funds can often be blurred, but the key distinctions can be summarized as follows:
*Private equity funds generally invest in large companies with the intent to restructure and sell the firms for a gain. 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.
