Reading an SPV before you sign: economics, governance, expenses

A special purpose vehicle is not an investment. It is a wrapper around one, and the wrapper has its own economics, governance and expenses that change what you actually own.

Before any commitment, three document questions matter. Economics: how do management fees, carried interest and expenses flow, and who pays them in a downside case? Governance: who decides on follow-ons, extensions and exits, and what rights do investors actually retain? Expenses: what is charged to the vehicle, formation, administration, diligence, and how is it disclosed?

Private investments and pre-IPO securities are generally illiquid and involve substantial risk, up to the loss of the entire investment. Eligibility and accreditation requirements apply. The only reliable description of an opportunity is the applicable offering documents, read them carefully with your independent legal, tax and financial advisors before anything is signed.