Private Fund

A private fund is a pooled investment vehicle that is excluded from the definition of an investment company by Section 3(c)(1) or 3(c)(7) of the Investment Company Act—commonly referred to as a 3(c)(1) Fund or a 3(c)(7) Fund.

  • The term private fund is often associated with:
    • Private equity funds
    • Venture capital funds
    • Hedge funds

Private funds and their advisers are subject to other federal securities laws. When private funds raise capital from investors through exempt offerings, they must adhere to state and federal securities laws.

Furthermore, individuals managing private funds may need to register as an investment adviser with the SEC or relevant state securities regulators unless they qualify for exemptions from registration requirements, such as being classified as an exempt reporting adviser.

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