Banks, financial institutions, insurance and investment companies have special funds to invest in businesses.

Characteristics Of Private Funds
Institution Funds
Independent Funds
Corporate Funds
Fund-of-Funds (FoF)

Characteristics Of Private Funds

• Banks, financial institutions, insurance and investment companies have special funds to invest in businesses.
  
  
• There are 4 types of private funds you can tap into:

• Institution Funds
• Independent Funds
• Corporate Funds
• Fund-of-Funds

• Generally, the managers of these funds do not take an active part in managing your business.

• They invest for returns on investment or to support certain economic activities. They often work with venture capitalists to identify businesses to co-fund.

• Unless you are a well-known entrepreneur or established business, it is difficult to gain direct access into these funds without an intermediary e.g. venture capitalist, deal broker, etc.

Institution Funds

• They are generally set up by financial institutions such as banks and insurance companies.

• Some examples are:

• Citicorp
• Development Bank of Singapore (DBS)
• Morgan Stanley
• Standard Chartered
• OCBC Bank
• United Overseas Bank (UOB)

Independent Funds

• These funds are usually set up by wealthy individuals, companies and family groups to invest in specific activities e.g. infrastructural projects.

• Some examples are:

• Ayala
• Astra and Lippo
• NatSteel
• Wearnes

Corporate Funds

• These funds are set up by corporations to invest in smaller companies that are related to their business.

• They are often used to finance smaller companies who are developing products and innovations that would also benefit the corporation.

• Some examples are:

• Hewlett-Packard
• Microsoft Corporation

Fund-of-Funds (FoF) 

• FoF is different from other private equity funds in that it doesn't invest directly into businesses. Instead, FoF invests into venture capital and private equity funds that invest in businesses.
  
  
• In other words, FoF co-invests in businesses through venture capital and private equity funds.
  
  
• FoF is generally diverse in nature - it invests across industries using a variety of investment strategies.
  
  
• FoF benefits businesses in two ways:
  
  
  • FoF is a source of funds for ventural capital and buyout fund managers who invest directly into your business.
    
    
  • Businesses can invest their monies into FoF. FoF will actively manage the funds for you.

Government Fund of Funds

• TIF Ventures Pte Ltd (TIFV)
  TIFV is a government-owned fund-of-funds management company. It is organised as a wholly owned subsidiary of the Singapore Economic Development Board (EDB).  TIFV manages the US$1.3 billion Technopreneurship Investment Fund, which invests globally into venture capital and private equity funds.