Seward & Kissel’s First Report on Special Purpose Vehicles Highlights Continued Interest in Private Investments

A first-of-its-kind report on special purpose vehicles (SPVs) in the alternative investment industry from national law firm Seward & Kissel LLP reveals that investor demand for bespoke products and access to private investment opportunities continues. The inaugural SPV Snapshot Report offers detailed metrics on the investment focus, structure, and economics of SPVs. The full Report can be accessed here.

“The demand by investors for customized investment opportunities has continued, and is only growing,” said Kevin Neubauer, a partner in the Investment Management Group of Seward & Kissel. “We expect the formation of customized vehicles to increase given the continued demand for customized solutions by investors and the fundraising headwinds for managers.”

“We have seen some of the demand for SPVs coming from large asset managers that have historically focused on public investments but now want to participate in late-stage private companies, pre-IPO companies, or simply are looking to diversify their businesses and offer their clients a broader range of opportunities,” added Steve Nadel, a partner in the Investment Management Group.

Over 90% of investments made by SPVs in the Report were private in nature. For public investment SPVs, those investments typically fell into one of two buckets: (i) activist type positions or (ii) high conviction overflow co-investment positions.

Additional key findings of The Seward & Kissel SPV Snapshot Report include:

• More than 95% of the SPVs in the Report focused on a single investment opportunity.
• Over 90% of SPV investments were in the form of equity.
• Just 55% of private investment SPVs charged a management fee, while approximately 75% of public investment SPVs charged a management fee.
• For almost all of the SPVs in the Report, a single vehicle was established to accommodate both U.S. and non-U.S. investors.

About Seward & Kissel LLP

Seward & Kissel LLP, founded in 1890, is a leading U.S. law firm with an international reputation for excellence. The firm is particularly well known for its representation of both large, institutional private funds as well as emerging managers across all asset classes. The firm represents fund sponsors, their portfolio companies and their institutional investors.

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