Pledge fund
A pledge fund is a
venture financing and can be applied across a multitude of business sectors wherein investments are made on per-deal basis.[1][2]
Unlike the traditional
special purpose entity that purchases the shares. The fund may be organized within one SPV or establish separate SPVs for every portfolio investment. Execution of investors' right to opt-in and opt-out of deals makes pledge fund management, administration and documentation more complicated than of traditional private equity fund. Pledge fund model minimizes investing partners' capital risks but has certain drawbacks. For example, the extra time required to assess and screen investment opportunities and deal execution uncertainty may be disadvantageous in competitive acquisition process.[3]
See also
References
- ^ Will Kenton (January 6, 2018). "Pledge Fund". Investopedia. Retrieved September 21, 2019.
- ^ "Pledge Fund". Divestopedia. Retrieved September 21, 2019.
- ^ Geoff Kittredge, John W. Rife III. "Deal-By-Deal and Pledge Fund Models". EMPEA. Retrieved September 21, 2019.
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