What to remember about management companies and investment funds 🏦

What to remember about management companies and investment funds 🏦

Management companies and investment funds play an essential role in the world of finance. Whether you are a seasoned investor or a beginner, understanding how they work can help you make informed decisions and optimize your investments. Let's see together what you need to know about these key players in the market 💡

What is an investment fund? 💰

An investment fund is a financial vehicle that allows several investors to pool their money to invest in promising projects. In the case of funds from private equity, the objective is to support companies that are not listed on the stock exchange. Unlike funds that invest in the stock market, these funds focus on private companies, often with high growth potential.

Why invest in these funds? Here are a few reasons:

• ‍Delegating investment choices : you entrust your money to experts.‍
• Diversifying your investments : a fund invests in several companies, thus reducing risks.

How do I invest in an investment fund? 📈

There are several ways to participate in these funds, either directly or through specialized structures.

1. Through a management company 📊

Management companies are the entities responsible for the administration of funds. They select investments, manage portfolios, and ensure their profitability. In general, they are approved by theAMF (Financial Market Authority) to ensure their compliance with the regulations in force. Institutional investors (banks, insurance companies, etc.) often invest directly through these companies.

2. Through a Wealth Management Firm (CGP) 🧑 ‍ 💼

Individuals often prefer to go through CGP. These firms help to optimize taxation and to choose the right investments according to the investor profile. They also offer easy access to management companies, while taking care of administrative formalities (KYC, subscription, etc.).

3. Feeder Fund (Fund of Funds or Feeder Funds) 🍽️

Les feeder funds are a great solution for investors with smaller budgets, allowing them to invest in more exclusive funds (for example, Ardian or Goldman Sachs), which have high admission tickets. These funds combine the investments of several small investors and manage subscriptions for them.

Key terms you need to know 🔑

To navigate the world of investment funds calmly, it is essential to understand some specific terms. Here are some of the most important ones:

• ‍LP (Limited Partner) : Investors put their money into a fund.‍
• Fundraising : A process by which the fund requests additional funds from investors to fund participations.‍
• Private equity : Investments in unlisted companies.‍
• VL (Net Asset Value) : The value of a unit in a fund, which fluctuates according to the participations.

At Capsens, a web agency specialized in fintech, we help management companies and funds develop digital solutions that allow them to ensure the best possible customer experience while remaining transparent.