Setting up and managing your private equity fund

Setting up and managing your private equity fund

Thousands of practitioners across the country nurture the dream of establishing a private equity fund as a founding partner. For some fortunate people, they have been able to taste success and perseverance combined with industry growth and has supported the growth of new firms. Most private equity fund managers wonder what it takes to set up a successful fund that will help them earn revenue. As most debtors who are planning for debt management with the help of investment vehicles, private equity funds are said to be illiquid as it needs a time commitment of several years. Here are some ways in which you can set up a private equity fund.

  1. Make a list of all partnership documents: Every private equity fund is legally structured as partnerships and the operators of such a fund are known as partners. The investors in the fund are known as limited partners. As you get in touch with a lawyer, he will require drafting all the partnership documents so that everything is structured correctly and more and more firms come in to invest and start up the fund with tens and millions of dollars as capital.
  1. Define the investing guidelines: All private equity funds have their individual investing criteria. While there are some private equity funds that purchase companies that located within a particular geographic location, there are some others that buy companies that have a specific size or fall within a specific industry.
  1. Seek investors for funds: As you’re done with your investment portfolio guidelines, you need to seek investors for funds. Most of the private equity funds investors require a minimum investment amount of $250,000 or more. The private equity funds are particularly offered to the investors who are accredited by the SEC or the Securities and Exchange Commission. If you have a good and worthy network of investors, you may benefit with your private equity fund management.
  1. Purchase companies for boosting your portfolio: The objective and goal of the private equity fund will always determine the approach of the fund manager to select companies for boosting your portfolio. Contacting business attorneys and business brokers is a wise way of getting potential portfolio companies.
  1. Disburse earnings among investors: The profits that are earned within the private equity fund must be disbursed among the investors, thereby providing the capital for further running the fund. The bigger your returns are, the happier your investors will be.

Thus, if you’re wishing to set up a private equity fund, you must follow the simple yet effective steps mentioned above. Get worthwhile investors for the effective functioning of your private equity fund. For details visit

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