Investment Fund – To Open or Not to Open?

INVESTMENT FUND – TO OPEN OR NOT TO OPEN?

When setting up investment structures, we encounter various business models in practice. Some clearly fit within the existing regulatory framework, while for others, it is necessary to strike a balance between the client’s original vision, regulatory requirements, and the economic efficiency of the proposed solution.

If a client comes to us with an idea to finance their project through external sources but without a clear idea of the specific structure, we typically start by asking a few basic questions:

▪️Who will the investors be?
▪️How will the distribution work?
▪️What should the minimum (and ideal) investment amount be?
▪️What is the expected return on investment?
▪️In which markets should investments be offered?
▪️What is the scope of the project, or what should the investment be directed toward?

Based on this information, we can now begin to model an appropriate investment structure.

Establishing an investment fund is not always appropriate or necessary, even if that is the client’s initial idea. Conversely, some business models that appear to their founders to be ordinary business ventures may meet the criteria for collective investment and require compliance with the relevant regulations from the very beginning.

We also discussed Slovak fund solutions, their alternatives, and the consequences of operating without the necessary license in the next episode of Highgate Talks with Peter Varga and Tomáš Demo.

You’ll find a link to the podcast in the comments.

Highgate Group