Fundraising and closing

SPV (special purpose vehicle)

Also called Special purpose vehicle, Deal vehicle, Syndicate vehicle.

Definition

An SPV, special purpose vehicle, is a legal entity, usually a limited liability company or limited partnership, formed to make and hold a single investment or a defined group of investments, with its own investors, bank account, documents and economics, separate from any fund the sponsor manages.

Updated October 9, 2026Checked against our editorial standards

Example

A fund has a $4M allocation in a Series B, but the company offers $10M. The GP forms an SPV, raises $6M from eight of its LPs and two outside investors, and the SPV buys the extra $6M of shares. Terms: no management fee, 10% carried interest, organisational costs capped at $25,000. The company is later sold and the SPV's stake fetches $18M. Carry is 10% of the $12M gain, or $1.2M; investors receive $16.8M, a 2.8x. The SPV has filed its own Form D, kept its own capital accounts and issued its own K-1s from the day it was formed.

Confused with

Co-investment. The co-investment is the deal an investor does alongside the fund. The SPV is the wrapper it is usually done through.

Fund. A fund is a blind pool that makes many investments over an investment period. An SPV is formed for an investment that is already known.

Feeder fund. A feeder invests in a fund. An SPV invests in a company.

In practice

Each SPV relies on its own exemption from the Investment Company Act and counts its own investors against that exemption's limit, so investor numbers are managed vehicle by vehicle. Operationally an SPV is a small fund: a bank account, a set of subscription documents, a capital account per investor and a tax return, and a manager with twenty of them has twenty of each.

Related terms

Co-investmentA co-investment is an investment made by a limited partner, or another investor, directly into a portfolio company alongside a fund, outside the fund's own commitment, typically with reduced or no management fee and carried interest, and often structured through a special purpose vehicle that the general partner controls.
3(c)(1) fundA 3(c)(1) fund is a private fund excluded from the definition of investment company under Section 3(c)(1) of the Investment Company Act because its securities are beneficially owned by no more than 100 persons, or 250 for a qualifying venture capital fund with no more than $12 million in aggregate capital contributions and uncalled commitments, and it does not make a public offering.
Form DForm D is the notice of exempt offering of securities that an issuer, including a private fund, must file with the SEC within 15 days of the first sale in an offering relying on Regulation D, disclosing the issuer, the exemption claimed, the amount sold and the total offering amount.
Fund administratorA fund administrator is the firm, or the software operated in-house, that maintains a private fund's books: partner capital accounts, capital call and distribution processing, fee and waterfall calculations, NAV, investor statements and audit support.