The key difference between fund and spv is scope: a fund manages pooled capital across multiple investments, while an SPV targets a single asset or deal.
This structural distinction affects everything from investor control to risk exposure.
Whether you’re backing a startup, acquiring property, or co-investing with others, choosing between a fund and an SPV can shape the complexity and flexibility of your investment strategy.
This article breaks down how each one works and when to use a fund vs SPV.
- SPV Meaning
- What kind of entity is a fund?
- Who are the owners of a fund?
- What is the difference between a fund and an SPV?
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La información contenida en este artículo es meramente orientativa. No constituye asesoramiento financiero, jurídico o fiscal, ni una recomendación o solicitud de inversión. Algunos hechos pueden haber cambiado desde el momento de su redacción.
Special Purpose Vehicle Definition
A Special Purpose Vehicle is a legally separate entity created to carry out a single, well-defined financial or investment objective.
Unlike a typical company that might engage in multiple lines of business, an SPV exists solely to hold a specific asset or execute a particular transaction.
SPV Uses
- Property investments, where the entity holds a single building or development
- Venture capital syndicates, allowing multiple investors to pool capital into one startup
- Structured finance or securitizations, where underlying assets like loans or receivables are isolated from the parent company
Key features of special purpose vehicle
- Narrow purpose: Created for one deal or asset, not ongoing operations
- Risk isolation: Legal separation ensures liabilities stay within the SPV and don’t affect other holdings
- Fixed investor base: Ownership is typically static throughout the life of the vehicle
- Defined timeline: SPVs are often dissolved once the asset is sold or the project ends
This structure allows investors to ring-fence risk, simplify profit-sharing, and achieve clearer asset control especially in complex or cross-border investments.
What Type of Entity Is a Fund?
A fund is a pooled investment vehicle where capital from multiple investors is collectively managed by a fund manager or general partner.
It is designed to invest in a portfolio of assets such as stocks, private companies, real estate, or alternative assets based on a defined estrategia de inversión.
Funds are not usually structured as traditional operating companies. Instead, they often take the form of:
- Limited Partnerships (LPs) – Common in private equity and venture capital
- Unit Trusts – Popular in jurisdictions like the UK and Australia
- Société d’Investissement à Capital Variable (SICAV) – Used in European mutual funds
- Investment Trusts or Open-ended Investment Companies (OEICs) – In retail fund structures
Some fund types
- Mutual funds – Publicly available, diversified investment funds
- Hedge funds – Private, often aggressive strategies with broader asset classes
- Private equity funds – Closed-end vehicles that invest in private businesses
Key features of a fund
- Broad investment mandate – Designed to invest across multiple deals or sectors
- Ongoing capital deployment – Continues to source and invest capital over a defined lifecycle
- Regulatory oversight – Typically licensed, audited, and subject to investor protection rules
Unlike an SPV, which is deal-specific, a fund is built for long-term strategy execution across a diversified asset base.
Who Owns a Fund?
A fund is collectively owned by its investors typically referred to as limited partners (LPs) or shareholders, depending on the structure.
These individuals or institutions contribute capital in exchange for a proportional interest in the fund’s performance.
However, investors in a fund do not manage the day-to-day operations.
That responsibility falls to the fund manager or general partner (GP), who is tasked with:
- Sourcing and vetting investment opportunities
- Managing the fund’s assets according to a defined strategy
- Ensuring compliance with legal, financial, and regulatory requirements
In contrast to SPVs, which are often more transparent and asset-specific, funds offer less investor-level control.
Investors in a fund usually cannot vote on individual deals or change the fund’s direction once committed.
Key differences from SPV ownership include:
- Funds: Investors hold economic interest but defer control to the manager
- SPVs: Investors often have more direct oversight and governance rights tied to a single asset
Fund vs SPV: Key Differences at a Glance
| Feature | Fund | SPV |
| Purpose | Multi-asset investment platform | Created for a single asset, transaction, or project |
| Investor Control | Limited partners typically have no direct decision-making power | Investors often have more direct oversight and voting rights |
| Regulation | Heavily regulated, especially when public or cross-border | Generally lightly regulated, depending on jurisdiction |
| Risk Distribution | Diversified across a portfolio | Risk contained to one asset or project |
| Duration | Long-term lifecycle (often 7–10 years or more) | Tied to the life of the project or deal |
| Setup Complexity | High—requires licensing, structuring, and reporting | Moderate—simpler setup for targeted purposes |
When to Use a Fund vs SPV
Use a Fund when:
- You want broad diversification across multiple assets or companies.
- You prefer a passive investment managed by experienced professionals.
- Your goal is long-term capital growth, such as in private equity or mutual fund structures.
- You’re comfortable with limited control in exchange for pooled expertise and scalability.
Use an SPV when:
- You’re targeting a specific investment, such as a single property, startup equity, or joint venture.
- You want clear legal separation from other assets for liability, estate planning, or tax purposes.
- You’re co-investing with a small group, where governance rights, exit terms, and roles are clearly defined.
- You require deal-by-deal flexibility, often found in real estate syndications, angel investments, or bespoke structures.
Conclusión
Fund vs SPV isn’t just a technical distinction; it’s a decision that shapes how capital flows, how risks are contained, and how investors engage with an opportunity.
Choosing between a fund and an SPV comes down to the nature of the opportunity and the structure that best matches your investment goals.
Understanding how each works—legally, operationally, and strategically—can help you align your structure with the risk, return, and oversight you’re aiming for.
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Adam es un autor reconocido internacionalmente en temas financieros, con más de 830 millones de respuestas en Quora, un libro muy vendido en Amazon y colaborador de Forbes.
