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Private Equity Incubators
Building upon the strength of our SPAC practice group, EG&S has become actively involved in the emerging industry of Search Funds.
Search Funds are single purpose vehicles used by entrepreneurs to obtain commitments from investors interested in making private equity-like investments. Initially, the Search Fund raises only sufficient capital to fund its operations for two years, including compensation for the sponsors. During this period, the sponsors of the Search Fund network and search for appropriate target opportunities. Assuming that the original committed investors approve of the proposed acquisition target, the investors fund the balance of the necessary equity and the sponsors assume their new roles as managers of the acquired company. Given the investment objective of the entrepreneur and investors, our view is that a more appropriate name is a Private Equity Incubator (PEI).
Similar to our involvement in each of the SPAC, PIPE and Reverse Merger programs, we have worked with PEI sponsors to customize each PEI to be consistent with their unique investment approach.