Select Committee on Treasury Written Evidence


APPENDIX 1

TYPICAL PE FUND STRUCTURE

Fund Vehicle

  The fund vehicle is normally a limited partnership.

Investors

  The investors are typically pension schemes, Life insurers, corporate investors, University endowment schemes. Individual investors are a very small minority.

General Partner

  The general partner structured as a company or LLP and is responsible for running the partnership. It receives a share of profits/fee reflecting its costs. Much of it work is delegated to the advisory entity.

Advisory Entity

  The advisory entity a company or LLP located in main country of business activity. The advisor receives a share of profits or fees from the General Partner. There may also be local subsidiaries in other countries where the fund makes substantial investments.

Carry and Co investment

  Carry and co investment represents investments by employees and partners alongside the fund. Typically there will be a carry or co investment vehicle but this is only normally used to simplify administration.

Portfolio Companies

  The investment in portfolio companies represents investment in equity and debt as required.

April 2007


 
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Prepared 22 August 2007