Corporate Communicator - May 2009
We bring you this issue to highlight some key aspects and considerations of the rise of pooled investment vehicles and similar private equity funds from the ashes of the traditional credit and capital markets. The market conditions in which we are delivering this issue are unprecedented in our time. The credit markets are frozen and much of the equity capital is on the sidelines waiting for the market bottom to appear. The hallmark of this year and much of the last has been efforts to raise capital when traditional sources of funding have ceased to function.
During this period of economic uncertainty, there has been a noted increase in opportunistic spirit and entrepreneurship as companies and their principals have sought creative solutions to raise capital for their ongoing concerns and to seize on opportunities to purchase distressed assets in nearly all asset classes. To access capital and seize on these opportunities, there has been a movement towards pooled investment vehicles and similar private equity funds in an effort to deploy sidelined capital.
We have prepared this issue to discuss some of the tax, regulatory, structuring, and economic considerations of putting together an investment vehicle of this type. Indeed, you will see that, while these transactions provide a vehicle to access investment capital, they are not to be entered into without careful analysis and structuring.