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Seasoned Legal Counsel from a Houston Public Equity Funds Lawyer

Public equity funds are investment funds that raise money via an initial public offering (IPO) in order to invest in securities according to a specified investment strategy. The underlying investment strategy can be venture capital, buyouts, or financing small and medium-sized businesses, among others. The fund can also be industry or sector-specific or more broadly based.

The fund’s IPO is undertaken by filing a registration statement with the Securities and Exchange Commission. The money raised in the offering is then used to invest in assets that the fund will own.

Public equity funds have different liquidity features for investors. They can either trade on a national securities exchange, trade over-the-counter, or not trade at all. In order to provide some limited liquidity to investors, non-traded funds usually provide limited redemption rights to investors, usually quarterly.

Following are some common types of public equity funds:

  • Mutual funds (open-end funds) are the most common type of equity fund. Mutual funds sell shares to the public on a continuous basis and invest the monies in the companies or sectors that the fund’s management company has selected. Mutual fund investors can sell their shares back to the fund at any time at net asset value. Mutual funds are investment companies governed by the Investment Company Act of 1940.
  • Closed-end funds are like mutual funds in that they sell shares to the public in order to invest in securities. However, closed-end funds sell a fixed number of shares to the public to invest in securities and do not have the daily redemption feature of mutual funds. Rather, many closed-end funds trade on a national securities exchange to provide liquidity for their investors. It is possible for closed-end funds to operate similar to a mutual fund by selling shares on a continuous basis; however, a closed-end fund cannot have daily redemption by its shareholders. Rather, redemptions must be on a quarterly, semi-annual or annual basis, if at all. A closed-end fund can be managed by an external management company (like an open-end fund) or can have its own internal management team.
  • Business development companies (BDCs) are closed-end funds that invest in small and medium-sized businesses. These investments can be either via equity or debt. Many BDCs specialize in making loans to small and medium-sized businesses. BDCs are a type of investment fund governed by the Investment Company Act of 1940.
  • Real estate investment trusts (REITs) allow investors to pool their money together to purchase multiple properties. These properties are then often managed by the fund manager or an affiliate. REITs can also purchase real estate-related securities, such as pools of mortgages.
  • Special purpose acquisition companies (SPACs) sell shares in an IPO to finance the purchase of one or more businesses or assets. SPACs are the public market equivalent of a buyout fund.

Before investing, make sure you understand what your options are by speaking with an experienced Houston securities lawyer who can help you understand your rights and obligations are. We work to ensure our clients are in full compliance with all SEC and state regulations.

Are you thinking of starting an investment fund? Contact Whitley LLP Attorneys at Law today to discuss your legal options.

Providing Superior Representation

  • Extremely Knowledgeable and Competent

    “Samuel Whitley was extremely knowledgeable and competent about securities law and business in general. In preparing the fund documents, Sam offered helpful perspective and recommendations on related details based on his previous experience. Also, he was quite timely and responsive in his work, answering questions typically within a day or a few days of being asked. In addition, I had some unique circumstances to address and I found Sam to be creative in helping solve problems and in creating solutions. I had originally decided to work with him due to his experience in securities law. After working with him, I saw the direct benefit his experience provided for the work he accomplished for me. I'm glad I decided to work with Sam for these activities, and given another opportunity I would definitely choose again to work with Mr. Whitley.”


  • I really appreciate what this company does.

    “I really appreciate the legal services Mr Whitley rendered for my company Divergent Capital Partners LLC to buy and hold commercial real estate. The Whitley law firm has giving me advice on how to raise Capital for my company. I always get a quick response regarding my questions and legal concerns. I've been a client with the Whitley law firm for almost two years and my expectations are always full filled and exceeded. I highly recommend the Whitley law firm for business needs.”

    David Lewis

  • Accessible & Accommodating

    “R.Sam is very knowledgeable in Securities Law. Reliable adviser in deal structuring. Accessible and accommodating to clients.”


  • A Man of High Integrity & Character

    “Sam is a well educated attorney that specializes in corporate law, merger/acquisitions and SEC compliance. I have worked under his legal supervision since 2007 and continue to do so today. Sam is not only a fine attorney but considered by many, as a man of high integrity and character. I strongly recommend Sam Whitley if you are looking for legal counsel.”


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