The Basics of Private Equity Fund Formation and Structuring

Summary

Private equity funds formed in the United States generally are structured with certain features. There are different types of private funds, including venture capital funds, growth equity funds, buyout funds, and distressed funds. The investment managers, also known as sponsors, of a private equity fund receive management fees and profits from the fund's successful investments in portfolio companies. Passive investors in the private equity fund stand to potentially benefit from a high rate of return on their invested capital.