Traditional Private Equity Funds
⛏ Coming soon
Why Traditional Private Equity Matters to Solium
You're unlocking access to the highest-performing asset class in modern finance.
PE has historically outperformed public markets over 10–20 year horizons
By tokenizing these funds, Solium democratizes elite-level investing
It also brings RWA credibility and yield-bearing diversification into the Web3 space
What Are Traditional Private Equity Funds?
Traditional Private Equity Funds are pooled investment vehicles that acquire equity ownership in mature, private companies with the goal of improving performance, growing value, and eventually exiting at a profit — usually via a sale or IPO.
They typically follow a buyout model, and are managed by professional investment firms called private equity firms (e.g., Blackstone, KKR, Carlyle).
Key Characteristics
Structure
Limited Partnership (LP) model: Investors = Limited Partners, Fund Manager = General Partner (GP)
Investment Focus
Mid-to-large-sized established private companies (not startups)
Hold Period
3–7 years, depending on the turnaround or growth strategy
Minimum Investment
High — usually $1M+, accessible mainly to institutional investors
Liquidity
Illiquid — capital is locked during fund life; tokenization aims to improve this
Return Profile
High potential returns, but higher risk than public equity due to leverage and concentration
Fees
Commonly "2 and 20" — 2% management fee + 20% performance fee (carry)
Lifecycle of a Traditional PE Fund
Fundraising Phase – GPs raise capital from LPs (institutions, family offices, sovereign funds).
Investment Period – GPs deploy capital to acquire and restructure target companies.
Management Phase – PE firm adds value through cost-cutting, leadership changes, M&A, or operational improvements.
Exit Phase – The firm sells the company via IPO, M&A, or secondary buyout.
Distribution – Profits (if any) are returned to LPs, minus performance fees.
PE Investment Strategies
Leveraged Buyouts (LBOs): Use borrowed funds to amplify returns.
Growth Equity: Capital for expansion in companies that are cash-flow positive but not yet public.
Distressed/Turnaround: Buy underperforming businesses, improve operations, exit profitably.
Roll-ups: Consolidate fragmented industries (e.g., dental clinics, logistics firms) under one portfolio company.
Why Tokenize Traditional PE Funds?
Tokenization solves key barriers for everyday investors:
High Minimums
Fractional ownership lowers entry cost
Illiquidity
Secondary trading via smart contracts
Opacity
On-chain reporting = greater transparency
Long Lockups
Programmable exit windows or liquidity pools
Who Invests in Traditional PE Funds?
Pension Funds
Sovereign Wealth Funds
University Endowments
Family Offices
Ultra High Net Worth Individuals
(and now, tokenized retail platforms like Solium)
Last updated