Open-ended funds part 1: a new way forward for private market funds
Open-ended funds part 2: Pros and cons for LPs
Open-ended funds part 3: Pros and cons for GPs
Sharing insights from our experience with numerous open-ended private market funds while representing both general partners/sponsors (GPs) and limited partners/investors (LPs) in Canada and the United States, the third and final instalment of our three-part series on open-ended private market funds sets out some of the pros and cons from the perspective of GPs around leveraging this increasingly popular fund type1.
Open-ended funds are increasingly being sought after by players in the private equity space as a long-term option to raise and invest capital. This fund type is seen by many as an attractive alternative to traditional fund types with applicability for long-maturity income-generating assets like infrastructure and real estate (learn more about open-ended funds and real estate in our article here). With infrastructure and real estate emerging as key sectors for investment in the post-pandemic economic mix in North America, we are likely to see open-ended funds rise further in popularity.
Open-ended funds have certain benefits for GPs compared to closed-ended funds, including the following.
Open-ended funds can also have certain disadvantages for GPs compared to closed-ended funds, including the following.
To discuss these issues, please contact the author(s).
This publication is a general discussion of certain legal and related developments and should not be relied upon as legal advice. If you require legal advice, we would be pleased to discuss the issues in this publication with you, in the context of your particular circumstances.
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