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| What is a private fund? |
"Private fund management," pursuant to the Notification of the Office of the Securities and Exchange Commission (SEC), means the management of funds of a person or group of persons who has authorized the management of investment to acquire benefit from securities, whether or not investment in other assets is also made, for which management is conducted as an ordinary course of business, in consideration of a fee or other remuneration...
Private fund management is a type of money or asset management service rendered to a person or group of persons who wants to take part in the investment decision making of their own. The asset management company will make investment under the investment framework and restrictions as mutually agreed with the customers.
The target customers, either a person or group of persons, are those who have a sufficient amount of money or capital to fund the investment.
- Person means a natural person or a juristic entity.
- Group of persons refers to a composition of 2 to 35 persons (being either
all-natural persons or all-juristic entities or a mixture of both).
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The establishment of a private fund is an agreement between a number of customers and an asset management company or a financial institution licensed to undertake private fund management. It is thus not a juristic entity and all the assets are still owned by and carry the names of the customers. With the fund owned by the customers, the nationality of the fund is in accordance with that of the customers. Therefore, when benefit is acquired from the securities of the fund in form of dividend on shares or capital gains after sales of shares, the customers are subject to tax payment thereon at the same rate as if investment is directly made in such securities.
Private fund management business was introduced in Thailand in 1996. It requires a license from the Ministry of Finance and is under the supervision of the SEC. A company carrying out private fund management business shall be an AIMC member in the private fund business group.
Private funds are not intended to provide loans but aimed at serving the money savers who do not want nor have time to manage the saving by their own. They expect to receive yields from their saving through management by asset management companies, in which they can still take part in determining the investment policy.
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