👍

Benefits of SPVs

What are the benefits of using an SPV?

SPVs simplify the private equity market for all stakeholdersUsing an SPV as an investment vehicle has many benefits for fund managers, investors and portfolio companies.

For fund managers:

  • Legally compliant way of managing LP investments
  • SPVs can be used to set up investments into single assets, multiple assets and funds
  • Allows you to to set up investments in a wide range of asset classes (startups, private equity, art, cryptocurrency, oil and gas, real estate...)
  • By providing a way to quickly pool, larger amounts of capital, fund managers can more easily negotiate rights such as information rights from the portfolio company
  • Flexibility to set up the SPV according to their needs and requirements

For investors:

  • Democratizes private equity by being able to invest smaller ticket sizes
  • Access to syndicated blockbuster private equity deals
  • Fast and compliant way of investing, where all of the paperwork is arranged for the investor
  • Possibility to sell ownership stake of SPV interest offers more liquidity options

For portfolio companies:

  • SPVs can provide a quick way of raising pooled capital
  • Cleaner cap table as all smaller ticket sizes appear under one entity name
  • Angels investing into SPVs are often passive investors that won't try to influence the direction of the portfolio company