“Deal by Deal” Investment Structures

today’s market, which sees certain investors seeking transparency and direct involvement in their investment decisions, the models used for pooling capital for private market investing are evolving. The traditional private equity investment model is the blind pool fund, with investors committing capital to a fund for the manager to invest and divest at its discretion, in line with the fund’s investment policy.

Whilst this fund model works for many, there are growing numbers of investors today asking for a greater degree of transparency and control over the opportunities. A deal by deal structure is one such way of giving today’s (more learned and experienced) investors the control and transparency they desire. 

this structure is used to invest in a single deal

In the context of the deal-by-deal approach, investors will need to perform their own diligence on investments prior to deciding whether or not to invest,

There is a less well-defined set of “market standard” terms and approaches for deal-by-deal and pledge funds compared to the traditional private equity fund model. As a consequence, there is scope for a broader variation of economic and governance-related terms and more flexibility as to the terms offered by any one manager