What Is a Fund? Key Features and Example
The term “fund” is common in finance, yet it lacks a universal definition. You’ll encounter various types of funds, such as venture capital funds, mutual funds, hedge funds, pension funds, and private equity funds. While all are considered “funds,” they vary widely in structure, risk level, and regulatory oversight.
Despite these differences, most funds share three core features:
- Pooling Capital:
A fund gathers money from multiple investors into a single investment pool.
- Diversification:
Funds typically invest in a range of professional fund managers’ assets to help minimise risk.
- External management:
A professional fund manager, not the investors, makes investment decisions on behalf of the fund.
Example: PJS raises a $1B VC fund from investors (LP) like pension funds. These investors don’t choose where the money goes. Instead, PJS’s professional managers (GP) decide which startups to invest in. This is external management—investment decisions are made by fund managers, not the investors.
Who uses Funds and why?
Funds are used both by professional fund managers and investors to grow capital.
- Fund Managers: Also known as General Partners (GP), they manage the fund full-time using their expertise. They earn an annual management fee and a performance-based bonus called carried interest (or performance fee) if the fund performs well.
- Investors: Also known as Unit Holders and limited Partners (LP), they provide the capital but usually lack the time or expertise to invest directly. Investing in a fund gives them access to professional management and the potential for higher returns.
Fund managers offer expertise; investors provide capital—both aim to profit.
What is Nova (fund in a box)?
Nova (fund in a box) is a customisable, digital-first investment fund created using Auptimate’s online platform. It provides a quick, efficient way to launch and manage a fund with minimal administrative burden.
Key Features:
- Digital setup in minutes
- Cloud-native document management
- Full investor onboarding
- Automated compliance and KYC
- Fund management dashboard via Auptimate.
Most Funds are formed as Variable Capital Companies (VCCs) in Singapore, but options exist in other jurisdictions, such as the Cayman Islands.
Nova (Fund in a box) vs Angel Syndicate: What’s the Difference?
Nova (Fund in a box) and Angel Syndicate are investment vehicles built on Auptimate’s platform, but they serve different use cases. Here’s how they compare:
Feature | Nova (Fund in a box) | Angel Syndicate |
Investment Strategy | Multi-asset portfolio | Deal-by-deal basis |
Control | Fund Manager (external) | Lead Investor (internal) |
Investor Approval | Not usually required | Sometimes required |
Fees | Management + performance fees | Performance fee only |
Legal Structure | Typically VCC (Singapore) | Private limited company |
Onboarding | Continuous with multiple closings | One-time onboarding per deal |
Ideal For | Long-term fund managers | Syndicate or deal leads |
Summary
- Choose Nova (fund in a box) for a scalable, diversified fund structure with recurring investments.
- Choose Angel Syndicate for flexible, single-deal investments and shared control.
What next?
Ready to launch your fund? Book a call now and get started in minutes.
Would you prefer to connect by email? Contact us at info@auptimate.com—we’re here to help.
Still exploring? Visit auptimate.com for insights, resources, and everything you need to build confidently.
