What is a private fund?

Private funds, also called private investment funds, are a type of pooled investment vehicle (PIV) run by professional fund managers. Examples of private funds include hedge funds, private equity funds, real estate funds, and venture capital funds. Each type of private fund has a distinct investment strategy and risk profile.

How are private investment funds classified?

Private funds are classified as such according to exemptions found in the Investment Company Act of 1940. Hedge funds and private equity funds are two of the most common types of private investment funds. Private funds are expected to meet certain criteria to keep their status.

Who can invest in private equity funds?

Because of these strict qualifications, typical investors for private equity funds usually include institutions like pension funds and banks, or individuals like investment managers or people with a high net worth. What Is a Private Equity Firm?