Private Equity Funds Key Business, Legal and Tax Issues

Private Equity Funds Key Business, Legal and Tax Issues

A. Overview of Private Equity Funds

A private equity fund is a private pool of capital (a “Fund”) 
formed to make privately negotiated investments, which may 
include investments in leveraged buyouts, venture capital, 
real estate, infrastructure, mezzanine, workouts, distressed 
debt or other private equity funds.
Some Funds pursue a broader generalist strategy, while others focus 
on investments in one or more particular industries or business 
sectors, such as telecom, media and communications, healthcare, 
energy, infrastructure, technology, life sciences or financial services. 
Certain Funds also focus their investments in particular geographic 
regions or specific markets (such as emerging economies). In 
contrast to hedge funds, investments made by private equity funds 
are generally illiquid in nature. Typical investors in Funds include 
corporate pension plans, state and other governmental pension 

retirement plans, sovereign wealth funds, university endowments, 
charitable foundations, bank holding companies, insurance 
companies, family offices, funds of funds and high net worth 
individuals, all of which invest in Funds out of assets allocated to 
alternative or nontraditional investments.

1. What Is a Fund?
a. A typical Fund is structured as a fixed-life limited 
partnership (or series of parallel limited partnerships and/or 
feeder partnerships) whose partners have agreed 

Private Equity Funds Key Business, Legal and Tax Issues