What are Private Equity Funds?
rivate equity funds are associate to general partnerships, it is formed by private equity firms which are usually used to utilized and invest in different private companies. The private equity fund invests in different industries and these are called their general investment criteria.
Nevertheless, private equity funds normally have an investment philosophy that does not change throughout its term. This process takes longer for about 10 to 13 years. After this time period elapses, the private equity fund will be closed by having all funds issued back to limited partners.
Private Equity Fund Investment in Luxembourg
Private equity funds may invest directly in equity securities of the target investment, in the form of mezzanine debt or in both equity and debt. In general terms, private equity funds often focus on one of the following investment philosophies:
Luxembourg Private Equity Funds
In Luxembourg today, the private equity industry propose a platform of services and structuring opportunities. There are many products included, these include competitive structure for setting-up private equity and venture capital funds. Venture capital funds include (SICAR) Investment Company in risk capital or (SIF) specialised investment fund and structures for pan-European private equity and venture capital acquisitions.
Luxembourg has appeared as the supreme power for the structuring of private equity acquisitions and financings.
Luxembourg has raised its market share in private equity and venture capital funds. This is because of its non-regulated special purpose companies (includes SOPARFI- financial participation company) usually used for private equity acquisitions and financings that are similar. SOPARFI is a vehicle that is normally used for holding and financing activities in Luxembourg may it be private equity or capital investments. SOPARFI may fairly serve as a special purpose vehicle, it may also be a joint venture vehicle or most likely a private equity fund vehicle.
It may thus equally serve as a special purpose vehicle, a joint venture vehicle or more rarely a private equity fund vehicle.
The RAIF structure is a vehicle that combines the characteristics and structuring flexibilities of (SIFs) and (SICAR). This allows private equity and ventures capital fund creators to set up Luxembourg-domiciled funds. These funds are not subject to regulatory agreement by the Luxembourg supervisory authority. By this choice, it gives permission to the achievement of an importantly enhanced time-to-market for new fund launches.
Private Equity Structures in Luxembourg
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