A public equity fund has emerged as a viable investment option for investors looking for growth-stage companies with strong management teams. Lead Edge Capital, a technology-focused growth-stage investment firm, recently closed a $150 million public equity fund. The fund was raised from existing and new limited partners. It is an extension of Lead Edge’s private markets strategy and brings the total amount of capital under management to over $3 billion.
Public equity funds are similar to private equity funds in that they raise money through an initial public offering (IPO). These funds invest in stocks and bonds based on a defined investment strategy. This strategy can be either industry-specific or broad-based. The IPO involves filing a registration statement with the Securities and Exchange Commission and then investing the money in the assets that the fund will own.
Private equity funds, on the other hand, are actively managed by their general partners. They are deeply involved in the strategic goals of the company and the day-to-day operations. As a result, their fees are typically higher than public funds’. The most common structure for private equity funds is 2 and 20: investors pay a 2% annual fee and 20% of profits. However, some funds operate under other structures, and these may be more advantageous.
Public equity investments are usually a type of investment that entails buying and selling shares of a company. These investments are offered to a wide range of investors, including high net worth individuals and institutional investors. The risk factor associated with this type of investment is illiquidity. A public equity fund typically has a secondary market where investors can sell or buy their shares without any hassle.