Home Blog Private Equity Fund: Types, Structure, Legal Documents

Private Equity Fund: Types, Structure, Legal Documents

This page explains what a private equity fund is, its types and traits, and how a lawyer from ContractsCounsel can help you with it.

Jump to Section

What is a Private Equity Fund?

A private equity fund involves investing in a fund that’s managed by a private equity firm. The adviser will receive money from multiple investors and combine it so that the capital can be invested elsewhere. A common strategy is for a private equity fund to focus on operating companies and help them boost their value.

As a type of fund that’s not SEC-registered, a private equity fund doesn’t have to meet public disclosure rules, which is what makes it appealing to some investors.

Read the rest of this article to learn more about private equity funds and how they work.

What are the Types of Private Equity Funds?

There are two common categories of private equity funds. These are:

Venture Capital (VC)

Venture capital funds are typically invested in startups with growth potential but with restricted access to capital. This can help them to raise capital they need.

Investors find VCs interesting because they can generate high returns even though they do have some risks involved.

Buyout or Leveraged Buyout

These funds focus on older companies with known profits, with leveraged buyout funds using borrowed money to increase their returns. It’s common for buyouts to be larger than VC funds.

How are Private Equity Funds Structured?

A private equity fund is typically set up as a limited partnership, with two main parties involved:

  • Limited partner (LP). People investing the most capital are the LPs. They have limited liability, so they can only lose what they’ve invested in the fund.
  • General partner (GP). This is the entity who manages the fund with unlimited liability, while ensuring the fund operates as it’s supposed to and also investing in the fund.

Who Can Invest in a Private Equity Fund?

It’s common for both accredited investors and qualified clients to invest in private equity funds. Examples of both include insurance companies and pension funds. High-income and high-net-worth individuals are also considered, since the investments are usually significant.

What are Common Traits of Private Equity Funds?

There are some important things to know about private equity funds. Here are some terms you’ll likely encounter with them.

  • Illiquidity. Since this is a long-term investment, it can be held for many years before investors see returns. There are also restrictions on when investors are allowed to withdraw their investments.
  • Costs and fees. Offering documents presented to investors should include detailed information about any fees and expenses investors will have to encounter. It’s important to check all mention of fees to be well informed before investing.
  • Conflicts of interest. If there are any company interests that are in conflict with the funds being managed, this needs to be disclosed early on.
  • Exit considerations. It’s essential to know when exit will occur and how this can be conducted.
  • High risk, high reward. Private equity firms have access to a wide range of companies but they need to manage their risk by exercising due diligence.

How Do You Raise Private Equity Funds?

There are specific steps involved when raising private equity funds. These include the following:

  • Marketing before the fund launch. This serves to gauge investor interest and should occur several months before the launch.
  • Roadshow. The private equity firm’s team will conduct presentations as a way to promote their fund. This is a more established marketing effort.
  • Investor commitment. At this crucial stage, investors will sign agreements stating that they will commit capital to the private equity fund.
  • Closing the fund. There will be a closing period when a certain percentage of total capital is met, followed by further closings so that extra investors have a chance to join the fund.

What Legal Documents Do You Need When Investing in a Private Equity Fund?

Documents you’ll encounter with private equity funds include a Limited Partnership Agreement (LPA) and Investment Management Agreement (IMA).

Limited Partnership Agreement (LPA)

The fund’s LPA will outline all rights and duties of the partners. This includes processes related to how to distribute profits and funding steps to follow. It also specifies how many of the profits the GP receives.

Investment Management Agreement (IMA)

The private equity fund is in an agreement with the management company, so this agreement details important aspects of funding, such as compensation fees and activity scope. This is a legal document that’s central to the relationship between the two parties.

Subscription Agreement

This contract includes information about how investors will commit capital to the fund and has representations about their qualifications. Other information included in this agreement involves funding duties and fund term compliance.

Get a Legal Review of Your Private Equity Fund Documents

It’s recommended to get a legal review of your private equity fund documents. A professional lawyer will thoroughly review your documents to ensure they’re legally binding, clear, and easy to understand to prevent disputes.

You can find a lawyer on ContractsCounsel, an online legal marketplace where clients connect with vetted lawyers. To request a review, here are the steps to follow:

1. Post your project on the ContractsCounsel marketplace.

2. You’ll receive multiple lawyer bids.

3. Review the lawyers’ profiles according to factors such as their client ratings, years of experience, and fields of expertise.

4. Select a lawyer to work with.

Do You Need a Lawyer for Private Equity Funds?

You should hire a lawyer for private equity funds because these can be complex. Here is how they can help you.

  • They’ll ensure the private equity fund is well structured. They’ll help you choose the best legal structure depending on your expectations and financial goals.
  • They’ll draft documents you need, such as the PPM and LPA, so that they’re legal yet free of legal jargon that can cause issues.
  • They’ll help you stay legally compliant. By preventing mistakes, this will prevent you from having to pay fines or face other consequences.
  • They’ll negotiate agreement terms to reduce your risks.
  • They’ll ensure proper disclosure and liability protection.
  • They’ll help you navigate cross-border transactions, considering funds can take place across jurisdictions.

Where can you find a lawyer for private equity funds?

You can hire a lawyer who’s ready to assist you on ContractsCounsel. You’ll get to work with a professional lawyer who has years of experience in helping people select the right private equity fund and navigate all its complexities. This will give you peace of mind that you’re protecting your interests while reducing your risks.


ContractsCounsel is not a law firm, and this post should not be considered and does not contain legal advice. To ensure the information and advice in this post are correct, sufficient, and appropriate for your situation, please consult a licensed attorney. Also, using or accessing ContractsCounsel's site does not create an attorney-client relationship between you and ContractsCounsel.


How ContractsCounsel Works
Hiring a lawyer on ContractsCounsel is easy, transparent and affordable.
1. Post a Free Project
Complete our 4-step process to provide info on what you need done.
2. Get Bids to Review
Receive flat-fee bids from lawyers in our marketplace to compare.
3. Start Your Project
Securely pay to start working with the lawyer you select.

Meet some of our Lawyers

Kimbrelly K. on ContractsCounsel
View Kimbrelly
5.0 (4)
Member Since:
November 1, 2022

Kimbrelly K.

Attorney
Free Consultation
Lake Lure, NC
28 Yrs Experience
Licensed in NC
University of North Carolina at Chapel Hill

Attorney Kegler has been licensed to practice law in ​the State of North Carolina since 1998. Over the years,​ she has worked in firms that focused on small​ business financing, initial startup formation, to​ starting several businesses of her own with bootstrap​ financing to venture capital funding. As a Certified​ Dream Manager, she couples the skills of listening to​ understand the big picture to get to solutions that not​ only fit today's needs but also the long term needs of​ her entrepreneurial clients.​

Recent  ContractsCounsel Client  Review:
5.0

"Kimbrelly was very communicative and easy to work with, she did an amazing job helping me with my graphic design contract!"

Christina S. on ContractsCounsel
View Christina
5.0 (1)
Member Since:
November 1, 2022

Christina S.

Managing Attorney
Free Consultation
Kingsport, TN
15 Yrs Experience
Licensed in TN
Appalachian Law School

I am an attorney who has been practicing for over a decade, experienced in multiple areas of law, both from a litigation and more procedural side. The great thing about my practice is that it has trained me to deal with so many different types of problems and to find solutions in a variety of legal scenarios that are almost never similar.

Recent  ContractsCounsel Client  Review:
5.0

"Christina was prompt and friendly and walked me through the steps I needed to take to file for my name change! She made the process much less intimidating and I highly recommend her services."

Dean F. on ContractsCounsel
View Dean
5.0 (8)
Member Since:
November 18, 2022

Dean F.

Managing Attorney
Free Consultation
Castle Rock, CO
30 Yrs Experience
Licensed in CA, CO, TN
University of Mississippi School of Law

Ferraro Law Firm was founded by Dean C. Ferraro. Dean earned his Bachelor's Degree from California State Polytechnic University, Pomona ("Cal Poly Pomona") in 1992 and his J.D. Degree from the University of Mississippi School of Law ("Ole Miss") in 1996. He is licensed to practice law in the State Courts of Colorado, Tennessee, and California. Dean is also admitted to practice before the United States District Courts of Colorado (District of Colorado), California (Central District), and Tennessee (Eastern District). Shortly after earning his law license and working for a private law firm, Dean joined the District Attorney's office, where he worked for five successful years as one of the leading prosecuting attorneys in the State of Tennessee. After seven years of practicing law in Tennessee, Dean moved back to his birth state and practiced law in California from 2003-2015. In 2015, Dean moved with his family to Colorado, practicing law in beautiful Castle Rock, where he is recognized as a highly-effective attorney, well-versed in many areas of law. Dean's career has entailed practicing multiple areas of law, including civil litigation with a large law firm, prosecuting criminal cases as an Assistant District Attorney, In-House Counsel for Safeco Insurance, and as the founding member of an online law group that helped thousands of people get affordable legal services. Pursuing his passion for helping others, Dean now utilizes his legal and entrepreneurial experience to help his clients in their personal and business lives. Dean is also a bestselling author of two legal thrillers, Murder in Santa Barbara and Murder in Vail. He currently is working on his next legal thriller, The Grove Conspiracy, set to be published in 2023.

Recent  ContractsCounsel Client  Review:
5.0

"I would highly recommend Contract Counsel to friends or family. I received bids relatively quickly and was able to find the best fit for my situation."

Jason P. on ContractsCounsel
View Jason
5.0 (5)
Member Since:
December 1, 2022

Jason P.

Business Lawyer
Free Consultation
Portland, OR
10 Yrs Experience
Licensed in OR, WA
Lewis & Clark Law School

Jason is a self-starting, go-getting lawyer who takes a pragmatic approach to helping his clients. He co-founded Fortify Law because he was not satisfied with the traditional approach to providing legal services. He firmly believes that legal costs should be predictable, transparent and value-driven. Jason’s entrepreneurial mindset enables him to better understand his clients’ needs. His first taste of entrepreneurship came from an early age when he helped manage his family’s small free range cattle farm. Every morning, before school, he would deliver hay to a herd of 50 hungry cows. In addition, he was responsible for sweeping "the shop" at his parent's 40-employee HVAC business. Before becoming a lawyer, he clerked at the Lewis & Clark Small Business Legal Clinic where he handled a diverse range of legal issues including establishing new businesses, registering trademarks, and drafting contracts. He also spent time working with the in-house team at adidas® where, among other things, he reviewed and negotiated complex agreements and created training materials for employees. He also previously worked with Meriwether Group, a Portland-based business consulting firm focused on accelerating the growth of disruptive consumer brands and facilitating founder exits. These experiences have enabled Jason to not only understand the unique legal hurdles that can threaten a business, but also help position them for growth. Jason's practice focuses on Business and Intellectual Property Law, including: ​ -Reviewing and negotiating contracts -Resolving internal corporate disputes -Creating employment and HR policies -Registering and protecting intellectual property -Forming new businesses and subsidiaries -Facilitating Business mergers, acquisitions, and exit strategies -Conducting international business transactions ​​ In his free time, Jason is an adventure junkie and gear-head. He especially enjoys backpacking, kayaking, and snowboarding. He is also a technology enthusiast, craft beer connoisseur, and avid soccer player.

Recent  ContractsCounsel Client  Review:
5.0

"Very nice! Great on responding back and being available! Recommend 100% !"

Karl D. S. on ContractsCounsel
View Karl D.
4.7 (2)
Member Since:
October 28, 2022

Karl D. S.

Attorney
Free Consultation
Middlebury, Connecticut
14 Yrs Experience
Licensed in CT, MA
Pepperdine University School of Law

Karl D. Shehu, has a multidisciplinary practice encompassing small business law, estate and legacy planning, real estate law, and litigation. Attorney Shehu has assisted families, physicians, professionals, and people of faith provide for their loved ones by crafting individualized estate and legacy plans. Protecting families and safeguarding families is his passion. Attorney Shehu routinely represents lenders, buyers, sellers, and businesses in real estate transactions, researching and resolving title defects, escrowing funds, and drafting lending documents. To date, Attorney Shehu has closed a real estate deal in every town in Connecticut. As a litigator, Attorney Shehu has proven willing to engage in contentious court battles to obtain results for his clients. While practicing at DLA Piper, LLP, in Boston, Attorney Shehu represented the world’s largest pharmaceutical companies in multidistrict litigations filed throughout the United States. He has been a passionate advocate for immigrants and the seriously injured, frequently advising against lowball settlement offers. He is willing to try every case to verdict, and he meticulously prepares every case for trial. Attorney Shehu began his legal career as a consumer lawyer, utilizing fee-shifting statutes to force unscrupulous businesses to pay the legal fees of aggrieved consumers. For example, in Access Therapies v. Mendoza, 1:13-cv-01317 (S.D. Ind. 2014), Attorney Shehu utilized unique interpretations of the Trafficking Victims Protection Act, Truth-in-Lending Act, and Racketeer Influenced and Corrupt Organizations Act (RICO) to obtain a favorable result for his immigrant client. Attorney Shehu is a Waterbury, Connecticut native. He attended Our Lady of Mount Carmel grammar school, The Loomis Chaffee School, and Chase Collegiate School before earning degrees from Boston College, the University of Oxford’s Said Business School in England, and Pepperdine University School of Law. At Oxford, Karl was voted president of his class. Outside of his law practice, Attorney Shehu has worked to improve the world around him by participating in numerous charitable endeavors. He is a former candidate for the Connecticut Senate and a parishioner of St. Patrick Parish and Oratory in Waterbury. In addition, Attorney Shehu has written extensively on the Twenty-fifth Amendment and law firm retention by multinational firms.

Myron M. on ContractsCounsel
View Myron
Member Since:
November 3, 2022

Myron M.

Attorney
Free Consultation
Dallas, Texas
28 Yrs Experience
Licensed in TX
South Texas College of Law

For over 20 years Myron E. Mims Esq. has provided legal and consulting services to small and medium sized businesses. Mims served as regional counsel for a real estate investment and development firm where he managed the Company’s contract execution and management, and dispute resolution affairs. Mims was responsible for oversight and risk management of all legal affairs, including management of a robust litigation docket consisting of a seven figure, multi-party construction lawsuit, and multiple vendor and tenant disputes. Mims prepared new contract docs and implemented execution and management processes that lead to the reduction of litigation. As a managing partner of Nixon Mims, LLP Mims provided legal and consulting services to clients of that consisted of real estate, construction, telecommunications, media and food industry businesses. Mims routinely assisted clients with developing corporate governance and management protocols, strategic planning initiatives, and advised clients in the negotiation and execution of complex business transactions. Mims routinely provided operational oversight and technical analysis for management. During this period Mims obtained firsthand experience of the access to capital impediments and challenges that growth-stage businesses face.

Maigan W. on ContractsCounsel
View Maigan
Member Since:
November 2, 2022

Maigan W.

Principal Attorney
Free Consultation
Los Angeles, California
5 Yrs Experience
Licensed in CA
California Western School of LaW

Maigan is a registered nurse and attorney with experience in technology, start-ups, blockchain, healthcare privacy, and employment law. She brings a practical, cross-disciplinary perspective to her work and speaks conversational Spanish. Technology, Start-Ups & Blockchain Maigan served as general counsel for a software-as-a-service company for three years and has a strong understanding of cryptocurrency and smart contracts. She helps businesses form entities; drafts and negotiates contracts and other agreements; assists with trademark applications, terms of service, privacy notices, fundraising; and consults with attorneys seeking blockchain and cryptocurrency experience. Healthcare Privacy As a registered nurse, Maigan brings firsthand healthcare experience to privacy matters. She advises on data breaches and compliance with HIPAA and California privacy laws. Employment Law Maigan represents California employees in matters involving wrongful termination, discrimination, harassment, and retaliation. Her wage-and-hour practice includes claims involving unpaid overtime, missed meal or rest breaks, minimum-wage violations, off-the-clock work, and misclassification as an independent contractor or exempt employee. She also handles employment class actions.

David W. on ContractsCounsel
View David
Member Since:
November 2, 2022

David W.

Attorney
Free Consultation
Texas
10 Yrs Experience
Licensed in TX
South Texas College of Law

Founder David W. Weygandt, the Singing Lawyer, is passionate about helping families and businesses stay in tune with what they care about and avoid conflict. When injustice has been done, David is proud to stand up to the modern Goliath and vindicate your rights on your behalf. David lives and practices law in The Woodlands, Texas, and assists clients all across Texas.

Ari G. on ContractsCounsel
View Ari
Member Since:
November 28, 2022

Ari G.

Of Counsel
Free Consultation
Ann Arbor, MI
5 Yrs Experience
Licensed in MI
University of Michigan

Ari is a transactional attorney with substantial experience serving clients in regulated industries. He has worked extensively with companies in regulated state cannabis markets on developing governance documents (LLC operating agreements, corporate bylaws, etc...), as well as drafting and negotiating all manner of business and real estate contracts.

Jessica F. on ContractsCounsel
View Jessica
Member Since:
January 24, 2023

Jessica F.

Solo Law Practice
Free Consultation
New York, New York
24 Yrs Experience
Licensed in NY
University of Dayton School of Law

I'm a knowledgable and experienced New York licensed attorney with strong contract drafting and negotiation skills, a sophisticated business acumen, and a background working in entertainment and technology law.

Evan F. on ContractsCounsel
View Evan
Member Since:
December 3, 2022

Evan F.

Attorney & Founding Member
Free Consultation
Livonia, MI
6 Yrs Experience
Licensed in MI
Wayne State University Law School

Evan Ficaj Law Firm empowers Michigan entrepreneurs with personalized legal solutions in M&A, LLC, business, contract, entertainment, trademark, and copyright law.

Find the best lawyer for your project

Browse Lawyers Now

Quick, user friendly and one of the better ways I've come across to get ahold of lawyers willing to take new clients.

View Trustpilot Review

Need help with a legal contract?

Post Your Project

Get Free Bids to Compare

Hire Your Lawyer

CONTRACT LAWYERS BY TOP CITIES
See All Corporate Lawyers
PRIVATE EQUITY FUND LAWYERS BY CITY
See All Private Equity Fund Lawyers

Contracts Counsel was incredibly helpful and easy to use. I submitted a project for a lawyer's help within a day I had received over 6 proposals from qualified lawyers. I submitted a bid that works best for my business and we went forward with the project.

View Trustpilot Review

I never knew how difficult it was to obtain representation or a lawyer, and ContractsCounsel was EXACTLY the type of service I was hoping for when I was in a pinch. Working with their service was efficient, effective and made me feel in control. Thank you so much and should I ever need attorney services down the road, I'll certainly be a repeat customer.

View Trustpilot Review

I got 5 bids within 24h of posting my project. I choose the person who provided the most detailed and relevant intro letter, highlighting their experience relevant to my project. I am very satisfied with the outcome and quality of the two agreements that were produced, they actually far exceed my expectations.

View Trustpilot Review

How It Works

Post Your Project

Get Free Bids to Compare

Hire Your Lawyer

Want to speak to someone?

Get in touch below and we will schedule a time to connect!

Request a call

Find lawyers and attorneys by city