In a traditional private equity fund, the fund managers will raise money from investors to establish a pool of capital the fund can then use to invest in a number of portfolio companies. A big benefit of a fund is that the fund managers can invest immediately in a new portfolio company (as the fund can call committed capital from investors at any time). One potential downside of a fund is that, if promising potential portfolio companies are scarce, the investors' money is still tied up and subject to management fees.
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