Private Equity Fund

At One Legal Square, our globally recognized Private Equity team handles more buyouts and growth equity transactions than any other firm in the region. This extensive experience allows our Private Equity lawyers to offer deep market insight and a powerful network of industry relationships to help clients secure successful deals and maximise equity value.

We represent private equity sponsors, early- to late-stage investors, portfolio companies, senior management teams, lenders, financial institutions, and alternative investors.

With experience advising more than 10,000 emerging growth companies across technology, healthcare, financial services, consumer, and real estate sectors, we deliver unparalleled expertise to our private equity clients. This means not only guiding them in acquiring target portfolio companies, but also ensuring they fully understand the targets before investment.

Our team focuses on five core areas: growth equity, private investment funds and debt finance. We also provide exceptional support in critical areas such as private equity litigation, intellectual property, privacy and cybersecurity, executive compensation, labour and employment, and tax.

What's a Private Equity Fund

Private equity funds are pooled investment vehicles typically available only to qualified purchasers or accredited investors. They are not public offerings and, when properly structured, are exempt from SEC registration. Unlike hedge funds, private equity funds are more commonly formed as closed-end funds.

Most private equity closed-end funds share these key characteristics:

1. They invest primarily in illiquid securities or assets with long-term investment horizons;
2. They are open to new investors for a limited period after initial closing, during which capital commitments are made (commitment period: typically 3–12 months);
3. Capital commitments require contributions when called by the fund during the investment period;
4. Investors generally have no right to withdraw or redeem interests and are locked in for the fund’s full term (usually 5–13 years, often extendable);
5. Distributions of cash or in-kind securities occur when the fund realises income from or sells investments;
6. The manager typically receives an annual management fee based on capital commitments, contributions, or unreturned capital;
7. The general partner usually receives a carried interest (share of net profits) upon successful realisation of investments.

For information about other fund structures, see the following links:

• Hedge Funds
• Incubator Funds
• Real Estate Funds including Syndication
• Digital Asset and Cryptocurrency Funds
• Offshore Funds

Private Equity Fund Structure

An efficient private equity fund structure is typically designed to maximise tax efficiency for investors. Most private equity funds are established as Delaware limited partnerships. The limited partnership has a general partner (often an LLC) and a separate investment manager (also typically an LLC).

The general partner exercises full control over fund activities, including portfolio management and business decisions, while the investment manager is responsible for capital raising and investment recommendations. This structure allows management fees to be paid to the investment manager and performance fees (carried interest) to the general partner.

Private equity fund managers often earn higher fees and benefits when outperforming competing funds investing in similar assets.

For more information on how we can assist you with your specific legal matters or questions, reach out to us here.