Question

1. What is the main benefit of separately Managed Accounts (SMAs) over Pooled Investment Vehicles.
2. Better performance
3. Better Transparency
4. Access to Good Manager
5. Higher Liquidity
6. Cheaper Management Fee

1. What are the descriptions of a typical Private Equity Fund?

! Equity Investment

II Invest in company not listed on a public stock exchange

III Investors are entitled to a preferred return

IV High Alignment of Interest between General Partner and Limited Partner

V Investors pay up commitment in day one

1. !, II and IV
2. I, II and III
3. II, III and IV
4. I, II, III and IV
5. All of the above

Answer 1

Answer(1): Option "B" is correct.

1. Better Transparency

Separately Managed Accounts (SMAs)- A SMA is a portfolio of assets that are managed by a professional investment banker of institution. SMAs are more similar to mutual funds but SMAs are more customized in investment strategy and management style. SMAs are little costlier.

It allows you to see your holding and transactions on real time basis.

Answer(2): Option "A" is correct.

! Equity Investment

II Invest in company not listed on a public stock exchange and

IV High Alignment of Interest between General Partner and Limited Partner

Private equity fund is the equity fund that invests into private companies, that are not listed on the exchange and has high risk and provides high return.