Glossary.

A collective investment that pools money from many investors to purchase stocks, bonds, or other securities. Managed by professionals with a defined investment objective. Mutual funds are usually open-ended.

A fund traded on public exchanges like a stock. ETFs hold a diversified portfolio of assets, similar to a mutual fund, but offers intraday trading and typically lower fees.

A type of mutual or ETF that aims to track the performance of a specific market index (e.g., S&P 500).

A mutual fund that invests in short-term, high-quality debt securities, offering liquidity and lower risk. Commonly used as a cash equivalent.

A private fund that employs a range of non-traditional investment strategies (e.g., leverage, derivatives, short-selling) to generate high returns, often with high risk. Typically open only to accredited investors.

An investment vehicle that raises capital to invest in private companies or buy out public companies. Often focuses on restructuring and reselling companies at a profit.

A type of private equity fund that provides early-stage financing to startups and small businesses with high growth potential, in exchange for equity.

An investment fund that invests in a portfolio of other investment funds rather than directly in stocks or bonds. Aims to diversify risk.

A fund that invests in cryptocurrencies and blockchain-related assets, offering exposure to the rapidly evolving digital asset market.

A fund that selects investments based on criteria related to sustainability, ethics, and social impact alongside financial performance.

A fund that invests in large-scale infrastructure projects such as transportation, energy, and utilities. Often used by institutional investors seeking long-term, stable returns.

A fund that invests in physical goods or commodities like oil, gold, or agricultural products. Can be structured as ETFs, mutual funds, or hedge funds.

A fund that invests in companies or securities that are in financial distress or bankruptcy, with the potential for high returns once the assets are restructured or sold.

A company that owns, operates, or finances income-generating real estate, typically traded on stock exchanges. Divided into equity REITs, mortgage REITs, and hybrid REITs.

A private fund investing in physical properties or real estate-related securities. Different from a REIT in terms of structure and taxation.

A mutual fund or ETF that invests in bonds or other debt instruments. Can be focused on specific types of bonds (e.g., government, corporate, municipal) or credit ratings (e.g., high-yield bonds).

A fund that invests in bank loans made to companies, offering exposure to the loan market.

A mutual fund that prioritizes generating income for its investors, often investing in bonds, dividend-paying stocks, or other income-generating assets.

A state-owned investment fund that manages national savings or foreign exchange reserves, often invested in bonds, real estate, and other assets.

A mutual fund or ETF that focuses on investing in a specific sector of the economy (e.g., technology, healthcare, energy).

A type of mutual fund or ETF that invests in a specific theme or trend, such as renewable energy, AI, or clean technology.

A mutual fund or ETF that uses borrowed capital or derivatives to amplify returns, but also increases the risk.

A fund that aims to deliver the opposite return of a specific benchmark or index, usually through derivatives. Used by investors seeking to profit from market declines.

A fund that invests in securities from around the world, providing broad exposure to international markets.

A fund that focuses on a specific region (e.g., Asia, Europe, Latin America), offering targeted exposure to the economic and political dynamics of that area.

A fund that invests solely in the securities of a particular country, such as a China Fund or Brazil Fund.

A fund that focuses on securities from emerging economies, which may offer higher growth potential but come with increased risk.

A mutual fund that holds both stocks and bonds, aiming to provide a mix of income, growth, and preservation of capital.

A fund that focuses on a specific region (e.g., Asia, Europe, Latin America), offering targeted exposure to the economic and political dynamics of that area.

Similar to a target-date fund, but the asset allocation is based on the investor’s age or stage in life.

A fund that invests in bonds issued by municipalities, with the interest income typically exempt from federal taxes (and sometimes state taxes).

A mutual fund designed to minimize taxable distributions, often through strategies like tax-loss harvesting or holding low-turnover investments.

An employer-sponsored retirement savings plan that invests in mutual funds, offering tax-deferred growth for employee contributions.

A retirement fund where contributions are made with post-tax income, and earnings grow tax-free, with no taxes on withdrawals in retirement.

A fund with a fixed number of shares issued during its initial public offering (IPO). Shares are traded on an exchange, but the fund manager cannot issue new shares.

A mutual fund or ETF where new shares can be created or redeemed at any time based on demand. The fund’s NAV is calculated daily.

A type of closed-end fund that periodically offers to buy back a portion of its shares from investors, offering liquidity while still investing in illiquid assets.

A hedge fund strategy that takes long positions in securities expected to increase in value and short positions in securities expected to decrease in value.

A hedge fund strategy that seeks to profit from corporate events like mergers, acquisitions, or bankruptcies.

A hedge fund that uses global macroeconomic data to make large bets on interest rates, currencies, commodities, and equities.

A hedge fund that exploits price discrepancies in different markets or securities to generate returns with minimal risk.

The person or entity responsible for the overall management of the fund. They set the fund's investment strategy and make decisions about which assets to buy and sell. Fund managers are typically accountable to investors and are key to the fund's performance.

Focuses on the day-to-day management of the fund’s portfolio, selecting and managing assets to align with the fund’s investment goals. They monitor market trends and make adjustments to the portfolio as necessary.

Supports the main portfolio manager and may focus on specific asset classes, sectors, or regions. Often works in collaboration with the lead portfolio manager on decision-making.

Oversees the fund’s entire investment strategy. The CIO often has ultimate decision-making authority on large strategic moves and ensures alignment between different portfolio managers or fund products within a firm.

Researches and analyzes investment opportunities. They provide the data, financial models, and insights to portfolio managers to help inform investment decisions.

Uses mathematical models and statistical techniques to identify patterns and trends in financial markets. Quants often work in hedge funds and firms that rely on algorithmic or systematic trading.

Executes the buying and selling of securities on behalf of the fund manager or portfolio manager. Traders work to optimize execution prices and manage liquidity, often in real-time.

A governing body responsible for overseeing the management of the fund and protecting the interests of shareholders. They appoint the fund manager, ensure the fund complies with regulations, and monitor overall performance.

A board member with no affiliation to the fund’s management company. Their role is to provide an objective viewpoint and ensure the fund acts in the best interest of investors.

A group of senior professionals responsible for reviewing and approving the fund’s investment decisions, ensuring they align with the fund’s goals and risk tolerance. Typically found in institutional funds and private equity firms.

A professional who identifies, measures, and mitigates risks within the fund’s portfolio, ensuring that the fund adheres to its risk management policy.

Ensures that the fund adheres to relevant laws, regulations, and internal policies. The CCO also oversees compliance with anti-money laundering (AML) rules, investor suitability, and other regulatory requirements.

An external or internal professional responsible for reviewing the fund’s financial statements and operations to ensure accuracy and regulatory compliance. Auditors provide an independent assessment to ensure transparency for investors.

A financial institution that holds and safeguards the fund’s assets, ensuring they are kept secure. The custodian is responsible for administrative tasks such as settlement of trades, corporate actions, and record-keeping.

Handles back-office operations, including accounting, reporting, pricing the fund's Net Asset Value (NAV), and maintaining financial records. They ensure smooth fund operations and regulatory compliance.

Responsible for calculating the NAV of the fund, maintaining accounting records, and ensuring proper valuation of the fund’s assets and liabilities.

A third-party service provider that maintains records of investor accounts, processes transactions (e.g., purchases and redemptions of shares), and issues account statements.

Provides a range of services to hedge funds and institutional investors, including clearing and settlement, securities lending, and leverage or margin services.

Provides legal advice to the fund and its management, ensuring compliance with securities regulations, drafting fund documents, and handling investor agreements. Specialized in financial law.

Offers guidance on the tax implications of fund investments and structures. They ensure that the fund remains tax-efficient and compliant with local and international tax laws.

An entity that markets and sells the fund’s shares to investors, often through financial intermediaries such as brokers or advisors. Distributors may also manage relationships with financial platforms.

A sales professional who works for the fund's distributor, tasked with promoting and selling the fund’s products to financial advisors, brokers, and institutional clients.

Develops and implements marketing, sales and investor relations strategies to promote the fund to potential investors. It may include branding, advertising, content creation, and investor communications but also digital marketing operations such as web development, investor onboarding and portals, and automations.

Manages communications between the fund and its current or potential investors. They provide updates on performance, answer investor queries, and handle investor reporting.

Operates platforms that distribute the fund’s shares online or through financial advisors. Examples include brokerage platforms or fintech applications.

An investor in a private fund (e.g., private equity, venture capital, or hedge fund). LPs provide capital but do not actively participate in the management of the fund. Their liability is limited to the amount they invest.

The managing partner of a private fund, responsible for making investment decisions, managing the fund, and handling day-to-day operations. GPs often contribute a smaller portion of the fund’s capital but receive a larger portion of the profits via performance fees.

Large organizations (e.g., pension funds, insurance companies, sovereign wealth funds) that invest substantial sums of money into funds. Institutional investors often negotiate lower fees and have more influence over fund decisions.

Individual investors who purchase shares of a fund. Retail investors typically have smaller investments compared to institutional investors and often buy into mutual funds, ETFs, or retirement funds.

A wealthy individual or entity that meets specific regulatory criteria (e.g., a high net worth) and is allowed to invest in private placements, hedge funds, and other unregistered securities.

An entity created to manage the wealth and investments of a single family or small group of families. They often allocate capital to various funds, particularly private equity and hedge funds.

A licensed professional who provides investment advice and financial planning services to clients. Advisors often recommend specific funds or create portfolios tailored to client needs.

A financial intermediary that facilitates the buying and selling of fund shares on behalf of investors. Brokers may work with mutual funds, ETFs, or alternative investment funds.

An independent advisor to institutional investors and pension funds, providing recommendations on asset allocation and fund selection based on performance analysis and risk considerations.

A specialized intermediary hired by private equity or hedge funds to raise capital from institutional investors and high-net-worth individuals.

A marketplace where shares of funds (such as ETFs or REITs) are listed and traded. The exchange provides liquidity and price discovery for investors.

An online or software-based platform that allows investors to buy, sell, and manage multiple fund investments. Examples include robo-advisors, broker platforms, and digital wealth management tools.

The total value of a fund’s assets minus its liabilities, typically expressed on a per-share basis. It reflects the value of each unit of the fund at a specific time.

The overall gain or loss made by the fund over a specific period, including both capital appreciation and dividends/interest. Expressed as a percentage of the initial investment.

The geometric average amount of money earned by an investment each year over a given time period. It smooths the return over time, making it easier to compare with other investments.

The total percentage increase or decrease in the value of an investment over a specific time period, without adjusting for the length of the time period.

The return that a fund has generated over a period of time, expressed as a percentage of the initial investment, without comparison to any benchmark or index.

Measures the return of a fund relative to a specific benchmark or index. A positive relative return indicates outperformance compared to the benchmark.

A measure of a fund's returns over overlapping time periods (e.g., 3-year rolling returns). It smooths out short-term volatility to give a clearer long-term performance picture.

A measure of a fund's returns over overlapping time periods (e.g., 3-year rolling returns). It smooths out short-term volatility to give a clearer long-term performance picture.

The return on investment after deducting all management fees, performance fees, and operating costs.

A risk-adjusted performance metric that measures how much return the fund generates per unit of risk (volatility). The higher the Sharpe ratio, the better the risk-adjusted return.

A variation of the Sharpe ratio that differentiates between harmful volatility (downside risk) and overall volatility. It only considers returns below a certain threshold (often zero or a target return).

Measures a fund’s returns adjusted for its beta (systematic risk). It looks at how much return is generated per unit of market risk.

Measures the excess return of a fund relative to a benchmark, adjusted for the tracking error. A higher information ratio indicates better risk-adjusted returns relative to the benchmark.

The excess return generated by the fund relative to what would have been expected given its beta (market risk). A positive alpha suggests the fund outperformed its expected return.

Adjusts a fund’s return to the level of risk in the market. It compares the fund's performance to a market benchmark but on a risk-adjusted basis, providing a clearer comparison.

Measures the volatility of the fund relative to the overall market. A beta greater than 1 indicates higher volatility than the market, while a beta less than 1 indicates lower volatility.

A measure of how much a fund’s returns vary from its average return. Higher standard deviation indicates higher volatility and greater risk.

A statistical measure of the dispersion of returns for a fund. It quantifies the degree to which the returns vary from the mean.

The largest observed loss from peak to trough during a specific period, providing insight into the downside risk of the fund.

Estimates the maximum loss a fund could experience over a specific period, with a given probability (e.g., 95% VaR means the fund is expected to lose no more than a certain amount 95% of the time).

Provides an estimate of the expected loss beyond the VaR threshold, representing the average loss when the VaR threshold is breached.

Similar to standard deviation but only considers negative returns. This measures the risk of losing money, focusing on harmful volatility.

Measures the difference between the returns of a fund and its benchmark. A low tracking error indicates that the fund closely follows the benchmark, while a high tracking error indicates significant deviation.

Measures the percentage of the fund’s movements that can be explained by movements in its benchmark index. An R² of 100% indicates perfect alignment with the benchmark.

Represents the excess return of the fund compared to the return of the benchmark, accounting for the risk taken. A positive alpha suggests outperformance, while a negative alpha suggests underperformance.

The return of a relevant market index or standard against which the fund’s performance is measured. It provides a baseline for performance comparisons.

Simulates extreme market conditions (e.g., financial crises, interest rate changes) to evaluate how the fund would perform under adverse scenarios.

Models different hypothetical market conditions (e.g., interest rate hikes, currency devaluations) to predict the impact on the fund’s performance.

Assesses the fund’s ability to meet redemption requests without significantly impacting the price of the fund’s assets. Funds holding less liquid assets (e.g., real estate, private equity) face higher liquidity risk.

Measures the risk that the fund's fixed-income securities may default. This is particularly relevant for bond funds and funds with high exposure to credit instruments.

Evaluates the fund’s exposure to a particular asset, sector, or geography, highlighting potential risks if those concentrated areas underperform.

The percentage of the fund’s assets used to cover its annual operating expenses, including management fees, administrative costs, and marketing expenses. A lower expense ratio generally indicates greater efficiency.

Measures the percentage of the fund’s holdings that have been replaced over a given period, typically one year. High turnover can lead to higher transaction costs and tax implications for investors.

The annual fee charged by the fund manager for managing the assets. It is usually expressed as a percentage of the fund’s assets under management (AUM).

An additional fee paid to the fund manager based on the fund’s performance, often linked to surpassing a certain benchmark or hurdle rate.

The income generated by the fund from dividends and interest, after expenses have been deducted.

A measure of the income (dividends or interest) paid to investors relative to the NAV or market price of the fund.

Measures the fund’s performance during periods when the benchmark is rising. An upside capture ratio greater than 100% indicates the fund outperforms the benchmark in up markets.

Measures the fund’s performance during periods when the benchmark is falling. A downside capture ratio below 100% means the fund declines less than the benchmark during down markets.

Measures how far a fund’s current price is from its average price, adjusted for volatility. It helps to assess whether the fund is overvalued or undervalued based on historical trends.

The percentage of a fund’s assets that go toward operating expenses, including management fees, administrative costs, and other expenses. It affects net investor returns.

The fee paid to the fund manager for managing the portfolio, usually included in the expense ratio.

A fee paid to the fund manager if the fund achieves a certain performance level or benchmark. Common in hedge funds and private equity.

Fees related to the general administrative operations of a fund, such as record-keeping, accounting, and compliance reporting.

Costs paid to the custodian for safeguarding the fund's assets and handling transactions, such as settlement and clearing of trades.

Expenses incurred during the buying and selling of securities within the fund. These can include brokerage commissions, bid-ask spreads, and market impact costs.

Measures how frequently assets within the fund are bought and sold. A higher turnover ratio may lead to higher transaction costs and tax implications for investors.

The ease with which a fund's assets can be converted into cash without affecting the price. Highly liquid assets can be sold quickly with minimal price impact.

The process of withdrawing money from a fund by selling shares back to the fund. Some funds, such as mutual funds, offer daily redemption, while others, like private equity, have longer lock-up periods.

A period during which investors are restricted from redeeming or selling their shares. Hedge funds and private equity funds often have lock-up periods to provide managers with stable capital.

A limitation imposed by some funds to cap the percentage of total assets that can be redeemed at one time, usually to prevent liquidity crises.

In extreme market conditions, fund managers may temporarily suspend redemptions to protect remaining investors from adverse effects of a mass sell-off.

The process of purchasing shares or units in a fund. The opposite of redemption, it increases an investor’s holding in the fund.

A regulatory requirement that obliges funds to verify the identity of their clients (investors) to prevent fraud, money laundering, and terrorist financing. Typically involves collecting personal information and validating identity documents.

A set of procedures and regulations that funds must follow to detect, prevent, and report money laundering activities. AML compliance is mandatory for most financial institutions and investment funds.

A formal legal document providing details about a fund's investment strategy, objectives, fees, risks, and performance. It is required by law and serves to inform potential investors.

A summary document that provides an overview of the fund’s performance, key metrics, investment strategy, and holdings. It is typically updated monthly or quarterly for investors.

A yearly publication that includes the financial statements, fund performance, management discussion, and analysis. It is often required by regulatory authorities for transparency.

A mid-year report providing a summary of the fund’s performance and financial condition. In many jurisdictions, it is legally required to complement the annual report.

A concise document required for UCITS funds in the EU that provides key information about the fund, including objectives, risk profile, charges, and past performance.

A document that shows the fund’s NAV per share on a regular basis, often daily or weekly. It allows investors to track the value of their investment.

A U.S. SEC-required document that investment advisors must file, providing details on their business, conflicts of interest, fees, and disciplinary history. It is a key compliance document for advisors managing private and hedge funds.

A report prepared by an independent auditor that provides an opinion on whether the fund’s financial statements accurately reflect its financial position. An annual audit is often required for compliance purposes.

A formal framework that outlines how a fund will identify, assess, manage, and monitor risks. It is a key component of regulatory compliance and fund governance.

The processes and tools used to ensure that the fund can meet redemption requests without negatively affecting performance. Liquidity management is critical for open-ended funds.

A formal legal document providing details about a fund's investment strategy, objectives, fees, risks, and performance. It is required by law and serves to inform potential investors.

A governing body within the fund that oversees risk management policies and practices, ensuring they are aligned with the fund’s objectives and regulatory requirements.

A process used by fund managers to evaluate how the fund might perform under extreme market conditions, such as financial crises, high inflation, or major interest rate changes.

The process by which the fund values its assets. This is particularly important for illiquid or hard-to-value assets, such as private equity or real estate.

Restrictions on the amount of debt or borrowed money a fund can use to enhance returns. Regulatory bodies often set maximum leverage limits to control systemic risk.

The risk that one of the fund's counterparties (e.g., a broker or clearinghouse) will fail to fulfill its contractual obligations, such as delivering securities or making payments.

A formal framework that outlines how a fund will identify, assess, manage, and monitor risks. It is a key component of regulatory compliance and fund governance.

The processes and tools used to ensure that the fund can meet redemption requests without negatively affecting performance. Liquidity management is critical for open-ended funds.

A formal legal document providing details about a fund's investment strategy, objectives, fees, risks, and performance. It is required by law and serves to inform potential investors.

A governing body within the fund that oversees risk management policies and practices, ensuring they are aligned with the fund’s objectives and regulatory requirements.

A process used by fund managers to evaluate how the fund might perform under extreme market conditions, such as financial crises, high inflation, or major interest rate changes.

The process by which the fund values its assets. This is particularly important for illiquid or hard-to-value assets, such as private equity or real estate.

Restrictions on the amount of debt or borrowed money a fund can use to enhance returns. Regulatory bodies often set maximum leverage limits to control systemic risk.

The risk that one of the fund's counterparties (e.g., a broker or clearinghouse) will fail to fulfill its contractual obligations, such as delivering securities or making payments.

External marketing firms hired to raise awareness and capital for the fund, typically specializing in certain investor types or geographic regions.

An intermediary who raises capital for a fund by connecting it with institutional investors, family offices, or high-net-worth individuals (HNWI). Placement agents are often compensated through a fee structure based on the capital raised.

Entities that distribute fund shares through a network of brokers, advisors, and financial institutions.

A coordinated series of in-person or virtual meetings where fund managers present the fund’s strategy, performance, and potential returns to prospective investors. Roadshows typically occur before launching a new fund or during significant fundraising rounds.

A large-scale event or an investor retreat where the fund invites existing and prospective investors to learn about its strategy, meet the management team, and get insights into market trends.

Private meetings with key potential investors during a roadshow to address specific questions and concerns.

A marketing document or presentation used to communicate a fund’s investment strategy, track record, target market, and unique value proposition to potential investors. It often serves as the centerpiece of the roadshow or other investor presentations.

A one-page summary providing high-level information about the fund, including performance metrics, strategy, and management team.

A more detailed document summarizing key statistics, investment strategy, performance, and asset allocation. Fact sheets are often updated quarterly or monthly.

A legal document provided to prospective investors in private funds, outlining the fund’s terms, risks, and legal structure. It complements the pitchbook and includes detailed disclosures for compliance purposes.

A document where investors formally agree to invest in the fund, outlining the terms of the investment and the investor's obligations.

A form used to gather essential information from investors, often related to regulatory requirements, such as confirming accredited investor status.

A quarterly or ad-hoc conference call between the fund’s management and investors to discuss performance, market conditions, and upcoming opportunities.

The total capital an investor agrees to invest in a fund over its life. Investors commit a fixed amount but typically do not contribute the full amount upfront. Instead, contributions are made in stages when the fund needs capital.

A legally binding commitment where investors are obligated to provide the full amount of capital they’ve pledged over the life of the fund.

A non-binding indication of interest from an investor, often used during the early stages of fundraising before finalizing legal agreements.

A formal request made by a fund to its investors for additional capital. Capital calls occur periodically as the fund identifies new investment opportunities or requires more capital to manage operations.

A timeline that outlines when the fund expects to make capital calls, allowing investors to prepare for future contributions.

The timeframe within which investors must respond to a capital call and provide the required capital. Failure to comply may lead to penalties or dilution of ownership.

A separate agreement between a fund and an individual investor, often large or strategic investors, to provide them with specific terms or privileges that may not be available to other investors.

A provision in some side letters that ensures an investor receives the best terms available to any other investor in the fund.

A clause in a side letter granting an investor the right to make additional direct investments alongside the fund in specific deals.

Detailed updates provided to investors on the fund’s performance, strategy execution, and market outlook. These reports may include financial statements, performance metrics, and qualitative commentary from the fund’s management team.

A section of the investor report that breaks down the sources of the fund’s performance, showing how different strategies or asset classes contributed to overall returns.

Insight from the fund’s management team regarding current economic and market conditions, often included in quarterly or annual reports.

A secure online platform where investors can access their account details, performance reports, capital call notices, and other relevant documentation. Portals also allow investors to download historical performance data.

A section of the investor portal where key documents like the PPM, subscription agreements, and quarterly reports are stored for investor access.

Some advanced portals offer real-time access to fund performance data and recent transactions, allowing investors to track their investment dynamically.

The in-house team or external agency responsible for maintaining communication with investors, addressing concerns, and ensuring that investors receive all necessary information on time.

A dedicated point of contact for investors, often part of the investor relations team, ensuring personalized communication and resolving any issues.

Regular updates sent via email or through the investor portal, providing insights into fund performance, market trends, or significant news events.

A formal meeting between the fund’s management team and its investors to review performance, discuss strategic changes, and address investor questions. AGMs often include presentations, Q&A sessions, and informal networking.

A quarterly or ad-hoc conference call between the fund’s management and investors to discuss performance, market conditions, and upcoming opportunities.

A compliance process that requires funds to verify the identity of their investors to prevent fraud, money laundering, or other illicit activities. This is often a prerequisite before investors can commit capital.

A set of regulations that funds must comply with to ensure their investors are not engaging in money laundering activities. This includes ongoing monitoring of investor transactions.

A process to ensure that investors meet the necessary financial or experience criteria to invest in private funds, as required by regulatory bodies such as the SEC.

The legal agreement signed by an investor committing capital to the fund, outlining the terms of investment, risk disclosures, and the investor’s responsibilities. It serves as a key compliance document in regulatory filings.

Sections within the subscription agreement or PPM that outline the key risks associated with the investment, including market risk, liquidity risk, and credit risk.

A policy that ensures the fund manager's interests are aligned with investors and prevents any potential conflicts between the manager’s own investments and those of the fund.

The process of bringing new investors into the fund, ensuring they meet compliance requirements and understand the terms of their investment.

A document used to assess whether an investor is suitable for the fund based on factors such as risk tolerance, financial status, and investment experience.

A compliance procedure where the fund checks new investors against the U.S. Treasury’s Office of Foreign Assets Control (OFAC) list to ensure they are not subject to sanctions.

The process through which investors can withdraw their capital from the fund, typically subject to notice periods and lock-up periods.

A period during which investors cannot redeem their shares or capital from the fund, often used in hedge funds and private equity.

The amount of time an investor must give before redeeming their shares, which allows the fund time to sell assets or manage liquidity.

Payments made to investors, typically in the form of dividends, interest, or profits from the sale of fund assets. Distributions may occur periodically or at the end of the fund’s lifecycle.

A payment structure where profits are distributed among investors and the fund manager in a specific order, often seen in private equity and real estate funds.

A clause in a waterfall structure that allows the fund manager to receive a portion of profits once investors have achieved a certain return threshold.

The process of managing the fund’s assets to ensure it can meet redemption requests and capital calls without negatively affecting the value of the portfolio.

A fund mechanism that limits the amount of capital investors can redeem in a specific period to protect the fund from liquidity shortages.

A mechanism used by hedge funds to separate illiquid assets from the main portfolio, ensuring that redemptions do not affect these harder-to-sell investments.

Automating the process of KYC/AML compliance and account setup for investors.

A system for managing relationships with current and potential investors.

Tools that help automate digital marketing efforts such as email campaigns, lead nurturing, and investor engagement.

Digital tools to equip sales teams with the resources to close deals efficiently (e.g., content management, data insights).

Strategies to capture potential investor interest and guide them through the sales funnel.

Tools for tracking the effectiveness of marketing campaigns and investor interactions.

Optimizing content to increase visibility on search engines for potential investors.

Platforms for organizing and distributing marketing content to investors.

Secure online platforms where investors can access their performance data, reports, and documentation.

Enabling investors to track their portfolio performance, asset allocations, and fund updates in real time.

Interactive graphs and dashboards in the investor portal to visualize fund performance.

A mechanism for securely sharing fund documentation, agreements, and compliance forms.

Regular digital reports accessible via the investor portal, reducing the need for physical documentation.

Allowing investors to update their contact information, access reports, or request distributions through the portal.

Digital platforms for organizing and managing investor roadshows.

Automating the process for capital calls, notifying investors of their commitment requirements and deadlines.

Tools for monitoring investor commitments, including stages of capital contributions.

Systems that track interactions, feedback, and communication history with investors.

Ensuring all investor documentation meets regulatory requirements, with automated updates on compliance status.

Developing and distributing blogs, reports, and articles to attract and engage potential investors.

Using platforms like LinkedIn and Twitter to build an online presence and engage with investors.

Leveraging industry influencers to increase visibility for the fund.

Tailored email campaigns to nurture existing investor relationships and attract new prospects.

Publishing whitepapers, market insights, and analysis to position the fund as a leader in its space.

Targeting specific high-net-worth individuals or institutional investors with personalized marketing strategies.

Use of webinars, investor presentations, or video updates to enhance communication with investors.

Marketing individual funds or investment products tailored to investor segments (e.g., growth funds, income-focused funds).

Providing investors with detailed insights into fund performance, risk exposure, and market comparison.

Regular updates and real-time performance monitoring of the fund’s assets.

Comparison of fund performance against key market benchmarks and competitor funds.

Digital systems that report on risk exposure, volatility, and compliance with investment mandates.

Tailored reporting solutions that meet the specific information needs of different investor segments.

Targeting specific high-net-worth individuals or institutional investors with personalized marketing strategies.

Use of webinars, investor presentations, or video updates to enhance communication with investors.

Marketing individual funds or investment products tailored to investor segments (e.g., growth funds, income-focused funds).

Ensuring investor identities are verified digitally and meet regulatory standards.

Safeguards for protecting investor data and communications on digital platforms.

Comparison of fund performance against key market benchmarks and competitor funds.

Digital systems that report on risk exposure, volatility, and compliance with investment mandates.

Tailored reporting solutions that meet the specific information needs of different investor segments.

Targeting specific high-net-worth individuals or institutional investors with personalized marketing strategies.

Use of webinars, investor presentations, or video updates to enhance communication with investors.

Marketing individual funds or investment products tailored to investor segments (e.g., growth funds, income-focused funds).

Tools to collect investor feedback on fund performance and customer service.

Tools for organizing webinars, virtual investor meetings, and annual general meetings.

Secure messaging platforms integrated into the investor portal for streamlined communication.

Digital systems to source, track, and evaluate potential investment opportunities.

Tools to manage deal flow and track progress from opportunity identification to closing.

Digital platforms to store and analyze due diligence documents.

Financial modeling tools to assess the value and impact of deals on the overall fund.

A basic investment strategy where the fund buys (goes long on) assets, expecting their prices to rise over time. It avoids short-selling and leverages the potential for capital appreciation.

A subset of the long-only strategy, where the focus is on stocks that pay high dividends, generating both income and potential capital appreciation.

A long-only strategy where the fund invests in a small number of stocks or securities, betting heavily on their future performance.

A more flexible strategy that involves taking long positions in assets expected to increase in value and short positions in those expected to decline. This approach aims to profit from both rising and falling markets.

A market-neutral long/short strategy where the fund simultaneously goes long and short on two correlated securities, betting that their price relationship will converge over time.

A strategy that seeks to eliminate broad market risk by holding both long and short positions in approximately equal proportions. It focuses on generating returns from the relative price movements of the assets rather than market-wide movements.

A sub-strategy of market neutral where the fund uses statistical models to exploit temporary mispricings between correlated securities, balancing long and short positions.

Involves buying stocks of companies involved in mergers or acquisitions and simultaneously shorting the acquiring company’s stock to profit from price discrepancies.

A highly speculative strategy where the fund exclusively takes short positions, betting on the decline in the prices of overvalued assets.

A form of shorting where the fund publicly criticizes a company’s business practices or financial health to drive its stock price down.

Focuses on shorting stocks expected to decline due to specific events, such as earnings releases, legal issues, or regulatory changes.

A strategy where investment decisions are based on mathematical models and statistical analysis of historical data. It minimizes human bias and relies on algorithms to identify opportunities.

A quantitative strategy that targets specific factors (e.g., value, momentum, size, volatility) that drive asset returns, building portfolios based on these characteristics.

A form of quantitative investing where trades are executed at extremely high speeds using algorithms to capitalize on small price movements.

A quantitative strategy that identifies and follows market trends by analyzing price momentum and trading in the direction of the trend.

An advanced form of quantitative investing that uses artificial intelligence (AI) and machine learning algorithms to detect hidden patterns in large datasets. The algorithms self-learn and adapt over time.

A machine learning technique that analyzes news, social media, and earnings reports to predict market movements.

An AI-driven strategy where the system is trained through trial and error to maximize returns in dynamic market conditions.

A strategy that uses quantitative models to invest in a variety of asset classes, such as currencies, commodities, bonds, and equities, based on macroeconomic trends and indicators. It is data-driven and often leverages complex algorithms to assess global economic conditions.

A strategy that focuses on companies or sectors expected to grow at an above-average rate compared to the overall market. These companies reinvest profits for expansion rather than paying dividends.

A subset that targets smaller companies with high growth potential, often in emerging industries.

A focus on technology companies that are believed to have long-term growth potential driven by innovation and disruption.

A strategy where the fund seeks out undervalued assets that are priced below their intrinsic value, betting that the market will eventually recognize their true worth, leading to a price correction.

A subset of value investing that focuses on extremely undervalued or distressed companies with significant turnaround potential.

A value-driven approach where the fund takes positions in assets that are out of favor with the market, expecting their fortunes to reverse over time.

A focus on investments that generate regular income, such as dividends, interest, or rental income, rather than capital appreciation.

Primarily invests in bonds and other debt instruments to generate stable income from interest payments.

Targets companies that not only pay dividends but have a history of consistently increasing their dividend payments over time.

An approach where the fund focuses on specific sectors of the economy that are expected to outperform, such as technology, healthcare, or energy.

A strategy that concentrates on investments in energy companies and natural resources, often influenced by commodity price trends.

Focuses on pharmaceutical, biotechnology, and healthcare companies, driven by long-term demographic and scientific trends.

A strategy that capitalizes on long-term macroeconomic, technological, or social themes such as climate change, digital transformation, or demographic shifts.

Investments made with the intention of generating positive social or environmental impact alongside financial returns.

Investments made with the intention of generating positive social or environmental impact alongside financial returns.

A strategy where the fund invests in a diversified portfolio of other investment funds, rather than in individual securities. It provides access to multiple managers and strategies, enhancing diversification.

A fund that invests in multiple hedge funds, providing investors with exposure to alternative investment strategies while spreading out risk.

A fund that invests in multiple mutual funds, offering exposure to a range of asset classes and investment styles.

A strategy focused on balancing risk and return by distributing investments across different asset classes such as equities, bonds, and cash.

A dynamic strategy that actively adjusts the asset mix in response to short-term market conditions or economic trends.

A long-term approach that maintains a consistent asset mix based on the investor’s risk tolerance and investment goals, with periodic rebalancing.

A multi-asset strategy that seeks to profit from macroeconomic shifts across countries and asset classes, including currencies, interest rates, commodities, and equities.

A top-down strategy where fund managers make investment decisions based on their interpretation of global economic trends and geopolitical events.

Focuses on investments in emerging economies, aiming to capture higher growth and returns but with additional risks related to political stability, currency volatility, and liquidity.

Involves investing directly in private companies or taking control of public companies to restructure and eventually exit at a profit through IPOs or sales.

A form of private equity focused on early-stage companies with high growth potential, often in technology or innovative sectors.

A private equity approach where the fund buys a controlling stake in a company, typically restructuring it to improve profitability before selling or taking it public.

A strategy focused on investments in real estate assets such as commercial properties, residential developments, or Real Estate Investment Trusts (REITs).

A conservative real estate strategy focused on high-quality, income-producing properties with stable cash flows.

A higher-risk strategy that involves developing, redeveloping, or repositioning properties to capitalize on market inefficiencies.

Investments in physical commodities such as gold, oil, or agricultural products, often as a hedge against inflation or currency risk.

A strategy that invests in futures contracts across commodities, currencies, and financial assets, often using leverage to amplify returns.

A wide-ranging category of alternative strategies that can use leverage, short-selling, derivatives, and complex instruments to achieve high returns.

A hedge fund strategy focused on corporate events like mergers, acquisitions, or bankruptcies, aiming to profit from the market impact of such events.

Involves investing in the bonds or other debt securities of companies in financial distress, often with the aim of restructuring or selling assets for profit.

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The initial phase where a fund manager raises the first round of capital to launch the fund, often from anchor investors or early backers.

The point at which the fund raises enough initial capital to start making investments, even as additional fundraising continues.

The stage when the fund has completed its fundraising efforts and will no longer accept new capital from investors.

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An early or lead investor who provides a substantial commitment to the fund, helping to attract other investors.

The total amount of capital that Limited Partners (LPs) agree to invest over the life of the fund, typically called down by the GP when needed.

A formal request made by the General Partner (GP) to the LPs to provide a portion of their capital commitment for investment or fund expenses.

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The phase during which the fund actively invests its capital, typically lasting 3-5 years. The GP identifies, evaluates, and acquires assets during this time.

The year in which the fund makes its first investment, often used as a benchmark to evaluate the fund’s performance relative to other funds of the same era.

The list of potential deals or investments that the GP is considering during the investment period.

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Uninvested capital that remains committed but not yet deployed by the fund, often used for future investments or follow-on rounds.

Additional capital that a fund allocates to an existing portfolio company to support its growth, usually after the initial investment has been made.

A company in which the private equity or venture capital fund has invested, part of the fund’s overall portfolio.

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The time frame during which investors are not allowed to withdraw or redeem their capital from the fund, often lasting several years.

A type of vesting schedule where investors or GPs cannot access any vested interest until a specific period has passed, after which the entire interest becomes available.

Rules or agreements that limit the ability of LPs to withdraw their capital before a set period or under specific conditions.

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A provision in the fund’s documents that requires the suspension of investment activities if a key executive leaves or is unable to perform their duties.

A special account used by hedge funds to segregate illiquid or hard-to-value investments from the rest of the fund’s more liquid assets, limiting investor withdrawals from these assets.

Primarily invests in bonds and other debt instruments to generate stable income from interest payments.

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The structure that dictates how profits are distributed between LPs and the GP. It typically specifies that LPs receive returns first, followed by the GP's performance fees after a hurdle rate is met.

The minimum return a fund must achieve before the GP can receive carried interest or performance fees, often around 8%.

Another term for the hurdle rate. LPs receive this before the GP begins collecting performance fees.

A feature in the waterfall structure that allows the GP to receive a larger share of profits after the LPs have received their preferred return.

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Payments made by the fund to investors, typically derived from returns on investments or capital gains realized during exits.

A distribution that repays the LPs' initial investment before any profits are distributed.

The GP’s share of the fund’s profits, typically taken after LPs have received their preferred return or hurdle rate.

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The process of selling an investment, allowing the fund to realize returns. Exits can be through public offerings, mergers and acquisitions (M&A), or secondary market sales.

A common exit strategy where a private portfolio company offers shares to the public for the first time, allowing the fund to sell its equity stake.

The sale of a portfolio company or an LP’s interest in a fund to another party, often used as an exit or liquidity event.

The sale of a portfolio company to a strategic buyer, such as another company in the same industry, as a means of exit.

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The process of liquidating the fund’s remaining assets and returning the capital to investors, typically occurring at the end of the fund’s life.

The selling of remaining assets in a fund, usually during the wind-down period, with proceeds distributed to LPs.

The last payment made to LPs, typically after all assets have been sold and the fund has fully liquidated.

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The lifespan of a fund, typically 10 years for private equity and venture capital funds, though this can vary depending on the fund type and investment strategy.

An additional period, typically 1-2 years, granted to a fund to complete its investment activities or fully exit its portfolio. These are often built into the fund’s term.

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A new fund created to acquire or hold assets from a previous fund that has reached the end of its term, allowing the GP to continue managing the assets.

A fund launched by the GP to make additional investments in a similar strategy or sector, often after the success of an earlier fund.

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The legal agreement between the GP and LPs that outlines the terms of the fund, including fees, investment strategy, and the waterfall structure.

A group of LPs or independent members that provide guidance to the GP on certain matters, such as conflicts of interest or major investment decisions.

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Updates provided by the GP to the LPs, typically including financial performance, portfolio company updates, and a breakdown of distributions.

The total value of a fund’s assets, minus liabilities, used as a metric to determine the performance and health of the fund.

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A metric used to measure the annualized rate of return of the fund's investments over time, accounting for the timing of cash flows.

The total value returned to investors divided by the amount of capital invested, often used to measure overall fund performance.

A provision that allows LPs to reclaim a portion of the GP’s carried interest if the fund underperforms or fails to meet its performance targets, ensuring that LPs are fairly compensated.