KAPITAL’s Post

Private capital funds taking more money from investors then has been distributed back to them to the tune of over $1.5trn should be nothing short of a wake-up call ⏰ The investor -> fund -> portfolio business value chain is inherently broken, with too much capital being siphoned off by middlemen. New technology enables vastly more effective and appropriate monitoring of financial activity and should be commonplace, but it's shunned in favour of hedging bets and a fake-it-till-you-make-it attitude. Portend is on a mission to prove real time due-diligence is the key to unlocking financial transparency and better more equitable relationships across the value chain 🚀 https://lnkd.in/eke4aCzq

𝐔𝐧𝐝𝐞𝐫𝐬𝐭𝐚𝐧𝐝𝐢𝐧𝐠 𝐭𝐡𝐞 𝐆𝐫𝐨𝐰𝐢𝐧𝐠 𝐒𝐢𝐠𝐧𝐢𝐟𝐢𝐜𝐚𝐧𝐜𝐞 𝐨𝐟 𝐒𝐏𝐕𝐬 𝐢𝐧 𝐈𝐧𝐯𝐞𝐬𝐭𝐦𝐞𝐧𝐭 𝐁𝐚𝐧𝐤𝐢𝐧𝐠 𝐖𝐡𝐚𝐭 𝐢𝐬 𝐚𝐧 𝐒𝐏𝐕? An SPV, or Special Purpose Vehicle, is a legal entity created for a specific financial transaction or to isolate financial risk. They are particularly beneficial when registering large funds, such as hedge funds, private equity funds, or mutual funds, which require substantial capital, time, and regulatory compliance. 𝐖𝐡𝐲 𝐔𝐬𝐞 𝐒𝐏𝐕𝐬? Registering a hedge fund, private equity fund, or mutual fund involves extensive infrastructure, regulatory licenses, and continuous fees, which can impact profitability and investor returns. SPVs offer a streamlined alternative, reducing the regulatory and financial burden. 𝑭𝒐𝒓 𝒊𝒏𝒔𝒕𝒂𝒏𝒄𝒆, in India, investing in a hedge fund typically requires a minimum of ₹1 crore. However, through an SPV, talented fund managers can offer entry points as low as ₹10,000-20,000, making investment opportunities more accessible. 𝐓𝐲𝐩𝐞𝐬 𝐨𝐟 𝐒𝐏𝐕𝐬 𝑺𝒊𝒏𝒈𝒍𝒆 𝑨𝒔𝒔𝒆𝒕 𝑺𝑷𝑽: Focuses on a single investment, such as purchasing a specific property or investing in a single company's IPO. 𝑴𝒖𝒍𝒕𝒊𝒑𝒍𝒆 𝑨𝒔𝒔𝒆𝒕 𝑺𝑷𝑽: Diversifies investments across various assets, like multiple stocks or properties. 𝐇𝐨𝐰 𝐒𝐏𝐕𝐬 𝐎𝐩𝐞𝐫𝐚𝐭𝐞 𝑭𝒖𝒏𝒅𝒓𝒂𝒊𝒔𝒊𝒏𝒈: SPVs raise capital from investors, who contribute smaller amounts compared to traditional funds. 𝑰𝒏𝒗𝒆𝒔𝒕𝒎𝒆𝒏𝒕: The collected funds are invested in the targeted assets. 𝑴𝒂𝒏𝒂𝒈𝒆𝒎𝒆𝒏𝒕 𝒂𝒏𝒅 𝑹𝒆𝒕𝒖𝒓𝒏𝒔: Fund managers oversee the investments, aiming to maximize returns, which are then distributed among investors. 𝐊𝐞𝐲 𝐅𝐞𝐚𝐭𝐮𝐫𝐞𝐬 𝐨𝐟 𝐒𝐏𝐕𝐬 𝑳𝒐𝒘𝒆𝒓 𝑬𝒏𝒕𝒓𝒚 𝑩𝒂𝒓𝒓𝒊𝒆𝒓𝒔: Investors can participate with smaller amounts, making high-quality investments more accessible. 𝑺𝒊𝒎𝒑𝒍𝒊𝒇𝒊𝒆𝒅 𝑨𝒄𝒄𝒐𝒖𝒏𝒕𝒊𝒏𝒈: While SPVs require accounting and reporting, the processes are less complex than those for larger funds. 𝑹𝒆𝒈𝒖𝒍𝒂𝒕𝒐𝒓𝒚 𝑭𝒍𝒆𝒙𝒊𝒃𝒊𝒍𝒊𝒕𝒚: SPVs are subject to fewer regulations, simplifying their operation and reducing costs. 𝐑𝐞𝐚𝐥-𝐖𝐨𝐫𝐥𝐝 𝐄𝐱𝐚𝐦𝐩𝐥𝐞 Imagine a talented fund manager who wants to invest in real estate but doesn't have the resources to establish a full-fledged private equity fund. By creating an SPV, the manager can pool funds from investors who each contribute ₹20,000. The SPV can then purchase a property, and any returns from rental income or property appreciation are distributed among the investors. #stockmarkets #JPMorgan #MorganStanley #CreditSuisse #GoldmanSachs #axa #anz #wns #bnymellon #citco #citibank #deutschebank #fis #jpmorganchase #imarticuslearning #northerntrust #statestreet #wellsfargo #operations #mumbai #delhi #chennai #bengaluru #pune #investment #help #career #job #opportunites #InvestmentBanking #interviews #InvestmentBanking #specialpurposevehicle

Venture-capital funds aren’t generating the supercharged returns they were several years ago. Fund yield dropped to 5.8% at the end of September last year, the most recent data available, hitting its lowest point since around the 2008 financial crisis. Yield is the percentage of net asset value that funds distributed to their investors over 12 months. https://lnkd.in/gBPAF4gc

Particularly valuable for: First-time fund managers plotting their market entry Established VCs looking to optimise their next fund structure #VentureCapital #FundStructuring #InvestmentStrategy

Garoud Capital Partners announced, today, the signing of an exclusive business agreement between Vistra (Luxembourg) and Garoud Capital Partners, which covers Vistra’s fund administration services, including services, such as, transfer agency and General Partner services   March 12, 2024, Luxembourg    LUXEMBOURG - March 12, 2024 - Garoud Capital Partners announced, today, the signing of an exclusive business agreement between Vistra (Luxembourg) and Garoud Capital Partners, which covers Vistra’s fund administration services, including services, such as, transfer agency and General Partner services. The agreement marks a crucial building block for Garoud Capital Partners, which is delighted to have a leading fund administrator with a global footprint by its side. Vistra’s vast experience servicing some of the top private equity fund managers will prove to be the perfect partner as Garoud Capital Partners launched its alternative investment firm in 2024, and will be investing in disruptive Tech-Startups, globally. In addition, Vistra is different from other administrators in the sense that despite the fact that Vistra is a global firm, clients are also being offered tailored solutions.   “It is a privilege to be partnering with Vistra, and this business agreement marks an incredibly exciting chapter for our Luxembourg-operations, as Vistra is expected to be creating enormous opportunities for the firm, mostly due to the multi-layers of capacities provided by Vistra,” said, Djamal Garoud, Founder & Principal of Garoud Capital Partners. Joost Knabben, Commercial Director at Vistra Luxembourg added: “We are delighted to announce our latest partnership with Garoud Capital Partners, which emphasises our commitment to delivering exceptional value to our clients and stakeholders. Showing a genuine interest in the business plan and taking the time to truly comprehend our clients’ needs and best operational set-up, reflects how Vistra is different from its competitors. Therefore, this partnership is not just about expanding our service offerings, it’s about reshaping how we work behind the scenes to be more efficient, responsive, and agile. We are committed to leveraging this collaboration to enhance our capabilities, improve client satisfaction, and drive sustainable growth.” To read the full press release, please use the link below, https://lnkd.in/ewsvTwwh

Great article by Partners Group pointing out advantages of our quarterly semi-liquid venture fund, Loyal VC, that I didn't even realise we had. Loyal deploys, and gives returns on, all your capital all the time. Other VC funds force you to hold capital for future deployment in low-yielding assets, and don't count that forced low yield in reporting your returns. To add insult to injury, they still charge you management fees on that low-yielding committed capital!! To us the Loyal way is just more sensible, and better for LPs. It is good to see others agreeing with us. Claudia Zeisberger https://lnkd.in/gbint4Jt

🔄 SEC Update 🔄 On August 21, 2024, the SEC updated the threshold for a "qualifying venture capital fund" under the Investment Company Act of 1940. This change to the maximum fund size, effective September 30, 2024, allows qualifying funds to raise up to $12 million in total capital contributions and uncalled committed capital from investors (up from $10 million previously). Qualifying funds can still accept up to 250 investors while remaining exempt from registration under Section 3(c)(1) of the Act. This update benefits emerging venture managers by enabling them to bring in smaller investors without needing to register as an investment company. The rule also allows the SEC to review and adjust this threshold every five years to account for inflation, ensuring the rule remains relevant over time. Fund managers with questions about how this new rule may affect their operations should consult with their legal counsel to ensure compliance and understand the implications for their funds.

How do I start a fund to make private equity or venture capital investments for my clients? I’ve answered this question in the article linked to below in the comments which should provide a detailed primer for advisers seeking to pursue this path. Private equity funds have become increasingly popular in recent years among those RIAs looking to offer a differentiated product to their clients and to increase their earning potential. Nonetheless, navigating the complexities of launching a private equity fund requires careful planning in order to navigate the numerous regulatory and legal landmines that can create risk for new fund managers. In the article, I provide a basic roadmap for those interested in forming a private equity fund and discuss, among other things - what is a private equity fund - how private equity funds are structured - who manages a private equity fund and how they are paid - key terms governing investments in private equity funds - the regulations that govern the offer and sale of private equity fund interests - who can invest in a private equity fund - what vendors are typically retained to provide services to a private equity fund - the documents that are typically drafted to form a private equity fund; and - how much it costs to launch and operate a private equity fund.  Please reach out if you have any questions on launching a private equity fund. #wealthmanagement #financialservices #privatefunds #privateequity #investmentadvisors #RIAs

#PrivateEquityBasics In Private Equity, definitely you heared about Close-ended funds, open-end funds, and evergreen funds. Here is all about their structures and how it works used in context of private equity investing: ▶️ Close-Ended Fund: Close-ended funds have a fixed capital commitment from investors, meaning they raise a specific amount of capital during a limited fundraising period. Investors commit their capital upfront and typically have a set period, often several years, during which they cannot withdraw their investments. The fund's life has a defined endpoint when it is liquidated, and the capital is distributed to investors. ▶️ Open-End Fund: Open-end funds, also known as open-ended funds or open-ended investment companies (OEICs), do not have a fixed capital commitment or a specific end date. Investors can typically buy or redeem shares in the fund at any time, and the fund's capital base can fluctuate as investors join or leave. Open-end funds are more liquid for investors but can be challenging for fund managers to manage the fund's size effectively. ▶️ Evergreen Fund: An evergreen fund is a type of open-end fund, but it operates with the intention of existing indefinitely, hence the term "evergreen." Investors have the flexibility to enter or exit the fund as desired. The fund continually reinvests its profits and capital rather than having a fixed endpoint like a close-ended fund.

Linnovate Partners secures $40 million to boost alternative investments services #LinnovatePartners, a trailblazer in asset servicing and #FinTech for the alternative investment sector, has just secured a whopping $40 million in funding from SeaTown Holdings International Master Fund. Led by SeaTown Holdings International, part of Seviora and Temasek’s asset management arm, this funding reaffirms Linnovate's position as a leader in the industry and marks a significant milestone in its growth journey. Founded and led by Henry Lin, Linnovate Partners is poised to utilize this strategic investment to expand operations, drive innovation, and further solidify its market leadership. Henry Lin expressed his enthusiasm, stating, "We are thrilled to have SeaTown as our strategic partner and investor. This investment will accelerate our growth trajectory and enable us to deliver cutting-edge solutions to our clients and the industry." Dickson Loo, Managing Director of SeaTown, echoed this sentiment, emphasizing Linnovate's industry-leading position and its commitment to customer-centricity and technology. He stated, "We are excited to be part of the next phase of Linnovate’s growth story." Linnovate's innovative approach to streamlining mid-to-back-office tasks through tech-enabled services has earned it a stellar reputation in the industry. Its focus on pushing technological boundaries has garnered trust from high-profile clients in the private equity and venture capital sectors, establishing it as a sought-after partner. Linnovate Partners offers a comprehensive suite of services spanning Fund Administration, Investor Relations, Regulatory Compliance, Portfolio Monitoring, Reporting Services, and Technology Consulting Services. With expertise across the entire fund lifecycle, Linnovate empowers asset and fund managers to excel in their operations, driving efficiency and value creation. The article on FinTech Global in the first comment. Want to stay up to date with the market? Here my newsletter: - Linkedin: https://t.ly/s541W   - Substack: https://lnkd.in/dzfGJzmW