Private Investment Fund

What is a 'Private Investment Fund'

A private investment fund is a type of financial investment company which meets either of these criteria:

a) it has less than 100 investors, or
b) its member investors have substantial funds invested elsewhere.

These types of funds are generally exempt from federal securities regulations and laws and are included under the label of "hedge funds".

BREAKING DOWN 'Private Investment Fund'

Due to the nature of these investment companies, their member investors generally have significant personal wealth and are considered sophisticated enough to not require the same level of regulatory protection accorded to small investors by law. This designation provides added flexibility for private investment funds.

RELATED TERMS
  1. Investment Fund

    A supply of capital belonging to numerous investors that is used ...
  2. Crossover Fund

    An investment fund that has investment holdings in both public ...
  3. Fund Of Funds

    A mutual fund that invests in other mutual funds. This method ...
  4. Investment Company

    A corporation or trust engaged in the business of investing the ...
  5. Hedge Fund

    An aggressively managed portfolio of investments that uses leveraged, ...
  6. Institutional Fund

    A fund that targets high value investors with low management ...
Related Articles
  1. ETFs & Mutual Funds

    Evaluating Hedge Fund Performance

    Most investors are aware of hedge funds, but many don't know the dirty details of this unique investment type.
  2. Investing

    Advising FAs: Explaining Mutual Funds to a Client

    More than 80 million people, or half of the households in America, invest in mutual funds. No matter what type of investor you are, there is bound to be a mutual fund that fits your style.
  3. Financial Advisor

    Understanding a Hedge Fund Manager's Worth

    Hedge funds pool investors’ money much like mutual funds. However, they are not as closely regulated as mutual funds, and although their investments may include stocks, bonds and other traditional ...
  4. ETFs & Mutual Funds

    Fund Of Funds - High Society For The Little Guy

    Like a mutual fund, FOFs provide instant diversity by grouping many hedge funds into one product.
  5. Retirement

    Should Balanced Funds Be Part Of Your Portfolio?

    Find out why you should include balanced funds in your portfolio, including the importance of customizability, diversification and professional management.
  6. ETFs & Mutual Funds

    How To Start A Hedge Fund In Canada

    Would-be hedge fund managers in Canada need to understand the laws and regulations that must be followed in order to start a fund in the country.
  7. ETFs & Mutual Funds

    How To Start a Hedge Fund In the United States

    A general overview of how to start a hedge fund firm in the United States, including complying with state and federal regulations.
  8. ETFs & Mutual Funds

    5 Characteristics of Strong Mutual Fund Shares

    Discover some of the basic characteristics shared by good mutual funds that investors can use to help them in selecting funds.
  9. ETFs & Mutual Funds

    6 Reasons Hedge Funds Underperform

    Understand the hedge fund industry and why it has grown exponentially since 1995. Learn about the top six reasons why the industry underperforms.
  10. Managing Wealth

    How Mutual Fund Managers Pick Stocks

    Learn about how mutual fund managers choose stocks based on the type of funds they manage and the investment goals of the funds' shareholders.
RELATED FAQS
  1. Is there a different type of fund, like a hedge fund, with less capital?

    Is there a type of fund, very much like a hedge fund, that doesn't require a high net worth to join? It's for a company ... Read Answer >>
  2. Do hedge funds invest in private companies?

    Understand how fund liquidity and investment returns as required by investors affect hedge funds' decisions to invest in ... Read Answer >>
  3. What is the difference between a hedge fund and a private equity fund?

    Learn the primary differences between hedge funds and private equity funds, both of which are utilized by high net worth ... Read Answer >>
  4. Where does a hedge fund get its money?

    Learn how a hedge fund is structured and how the managing partner of the fund goes about the process of finding and soliciting ... Read Answer >>
  5. Can you invest in hedge funds?

    Read about what it takes to invest in a hedge fund, and learn how some investors find ways to indirectly capture a hedge ... Read Answer >>
  6. Do hedge funds invest in mutual funds?

    Learn whether hedge funds invest in mutual funds. They are permitted to invest in mutual funds but usually avoid doing so ... Read Answer >>
Hot Definitions
  1. Put Option

    An option contract giving the owner the right, but not the obligation, to sell a specified amount of an underlying security ...
  2. Frexit

    Frexit – short for "French exit" – is a French spinoff of the term Brexit, which emerged when the United Kingdom voted to ...
  3. AAA

    The highest possible rating assigned to the bonds of an issuer by credit rating agencies. An issuer that is rated AAA has ...
  4. GBP

    The abbreviation for the British pound sterling, the official currency of the United Kingdom, the British Overseas Territories ...
  5. Diversification

    A risk management technique that mixes a wide variety of investments within a portfolio. The rationale behind this technique ...
  6. European Union - EU

    A group of European countries that participates in the world economy as one economic unit and operates under one official ...
Trading Center