Help: Fund Strategy definitions
This article lists and defines all fund strategies we track and shows you where to find them in PitchBook.
Funds are defined by the specific sectors, regions, and deal amounts that they target for their investments. This article will tell you everything you need to know about our fund strategy definitions and methodology and will show you where to find them in the platform.
For definitions of the methods by which funds implement their investment strategy, visit Fund access point.
Not a PitchBook customer?
Research process
PitchBook categorizes funds into strategies based on the reported deals the funds will focus on. If this information is not available, researchers refer to the investor’s stated preferences or investment behavior to determine the most likely fund strategy. Visit PitchBook’s research process to learn more about our data collection and validation.
Ready to get started?
This section defines each fund strategy in the platform. The categories grouping these fund strategies are called fund categories. The In the platform section below shows you where to find these a fund’s category and strategy.
Private Equity
Buyout
Equity funds primarily focus on purchasing at least a controlling percentage of a company’s stock to take over its assets and operations.
Growth/Expansion
Private equity funds that make minority (non-control) equity investments.
Diversified Private Equity
Private equity funds that participate substantially in several different deal types, including buyouts, recapitalizations, growth financings, etc.
Restructuring/Turnaround
This fund category is not directly related to a restructuring debt type. It is used for funds that often focus on taking controlling equity stakes in companies that are severely underperforming. This could be due to market conditions, poor management, or operational issues.
Venture Capital
Venture - General
Funds that invest in new companies with high growth rates regardless of round type or company maturity. This fund strategy may be used if the fund does not provide information about whether it focuses on early stage or later stage deals.
Angel Fund
A fund with capital contributed by a wealthy individual investor.
Venture Capital - Early Stage
A venture capital fund that focuses specifically on earlier financing rounds. This may include Seed, Series A, Series B, or other early rounds.
Venture Capital - Later Stage
A venture capital fund that focuses specifically on later financing rounds. This may include Series C, Series D, or other later rounds.
Debt
Debt - General
Funds that provide various types of debt on private equity transactions. This general category includes funds that don’t easily fall into the debt fund categories below.
Direct Lending
Provides a source of capital for companies, often in the form of senior financing alternatives, including revolving credit facilities, term loans, delayed draw term loans, second lien loans, and unitranche facilities. These loans often support platform acquisitions, portfolio company add-ons, recapitalization, and refinancings. The objective is to provide the fund’s investors with high current income, emphasizing capital preservation and attractive risk-adjusted returns.
Credit Special Situations
- Credit Trading
Typically involves acquiring a credit instrument (e.g., an issuer’s bonds) trading at a price that the investor believes presents a compelling value, perhaps because the overall market may be misjudging the ability of the issuer to meet its debt obligations. - Direct Origination or Capital Solutions
Focused on making direct loans to companies that cannot access traditional credit due to financial or operational challenges. Investors can originate a loan with strict covenants and at an interest rate well above typical bank loans to help a company refinance existing debt. Another term often used for this strategy is “Loan-to-Own,” as the lenders structure the credit to allow them to gain control of the borrower misses any of the covenants. - Distressed-for-Control
Invest in corporate credit to gain control of a company through a debt-for-equity restructuring. To achieve control, the strategy requires acquiring significant positions in the credit to play an active role in any restructuring.
Distressed Debt
Investment into the debt of a business that is suffering and needs help. The distress could be from operational hardship, industry hardship, or a mix of both. The debt may be in default or nearing a default state when the distressed debt investor steps in.
Mezzanine
Funds that provide subordinated debt financing for private equity transactions. These debt facilities usually include warrants.
Bridge Financing
Private debt funds that provide short-term loans, also called swing loans, are made in anticipation of intermediate-term or long-term financing.
Real Estate Debt
Private real estate debt funds have multiple strategies. The most popular one is direct lending, or loans made by private lenders directly to borrowers. Within direct lending, real estate is the most popular type of collateral. By issuing senior debt, direct lending funds prioritize other forms of financing such as mezzanine loans, preferred equity, or equity. The interest payments can lead to a known income stream for the investors, usually monthly.
Infrastructure Debt
Provides debt investments related to Infrastructure projects (like direct lending funds, with an infrastructure focus.) Infrastructure debt is an asset class that should provide stable returns and cash flows over long-term horizons due to the fundamental essentiality of these real assets, with low relative levels of default. Senior infrastructure debt is a lower risk profile than junior debt or equity in similar projects.
Venture Debt
Venture debt refers to a variety of debt financing products for venture-backed companies. Typically, venture debt is provided by banks or dedicated venture debt funds to complement equity financing. It can act as an attractive way to finance a business with less dilution than equity and does not require a valuation to be set for the company. Venture lenders don’t take board seats and have few governance requirements. But like any loan, venture debt needs to be repaid with interest over time.
Real Assets
Real Estate - General
This fund strategy indicates private equity funds that invest in buildings and land. This general category includes funds that don’t easily fall into the real estate fund categories below.
Real Estate Core
This fund strategy indicates funds focused on core real estate investments that target the “safest” forms of real estate investing: usually in strong markets with great locations, seeking high-quality properties with low vacancy rates. These funds target an IRR below 10%, typically have a “buy and hold” strategy, and include an income stream from property leasing and management activities. These properties are easily financed.
Real Estate Core Plus
This fund strategy indicates funds focused on core investments in their targeting of stable and fundamentally sound properties, these investors look for those with an opportunity to add value or enhance returns. These investments may have a slightly higher risk, like upcoming lease expirations, or may require mild renovations to add value and improve vacancy rates. There are typically no issues with securing financing for these investments.
Real Estate Value Added
This fund strategy indicates funds investing in properties often requiring additional effort and cost to drive enhanced returns: major renovation, repositioning, or reducing vacancy rates through effective marketing. The value-added investments may take longer to execute (5-7 years), and the return on the sale of the property should produce the majority of the expected returns (10-15%).
Real Estate Opportunistic
This fund strategy indicates funds investing with renovation needs, high vacancy rates, or relative strength of the market. New property development would fall in this category. The expected returns on these investments are in the 15%+ range.
Real Estate Distressed
This fund strategy indicates funds investing in properties where the current owner is in default or near default. These resemble Distressed Debt investments with the real estate asset backing the debt investment. Returns target closer to 20% IRR.
Real Assets & Natural Resources - General
Funds that focus on physical assets with intrinsic worth due to their substance and natural resources with commodities assets.
Oil/Gas
Funds that focus on investments most closely related to the upstream segment of the oil and gas industry. This refers to anything that has to do with the exploration and production of oil and natural gas—also known as “E&P.”
Metals & Mining
Funds focus on the location, extraction, and processing of metals and minerals, including copper, aluminum, silver, and coal.
Timber
A fund that invests in timberland: land used for growing trees to produce wood/lumber.
Agriculture
Funds that invest in farmland are used for growing crops and rearing animals to provide food, wool, and other products.
Infrastructure - General
This fund strategy indicates funds that invest specifically in infrastructure, including roads, canals, airports, power lines, etc. Fund focused on Infrastructure Core, Infrastructure Value Added, Infrastructure Opportunistic or Infrastructure Greenfield are not included as we have specific fund strategies for each.
Infrastructure Core
This fund strategy indicates funds that invest in core investments that target the “safest” forms of infrastructure investing: usually in solid markets with great investment opportunities. This fund strategy is sometimes referred to as Brownfield.
Infrastructure Core Plus
This fund strategy indicates funds that invest in core investments that target a slightly riskier form of infrastructure investing than Core but less risky than Value-Added. These risks may arise from investing in Core assets in emerging markets, projects in the early stages of development, or assets that are price-dependent, such as solar or wind power.
Infrastructure Value Added
This fund strategy indicates funds that invest in infrastructure projects often require additional effort and cost to drive enhanced returns.
Infrastructure Opportunistic
This fund strategy indicates funds that invest in infrastructure projects that need significant amounts of work.
Infrastructure Greenfield
This fund strategy indicates funds that invest in projects on unused lands where there is no need to remodel or demolish an existing structure. These are often called green field projects, and they complete new projects which are not there before. The projects are built up to sell, not to manage.
Other Fund Strategies
Hedge Fund
Funds that actively manage alternative investments that may utilize non-traditional investment strategies or asset classes.
Project Finance
The financing of long-term infrastructure, industrial projects, and public services is based upon a non-recourse or limited recourse financial structure where debt and equity used to finance the project are paid back from the cash flow generated by the project. Project finance is desirable to the private sector because it can fund major projects using balance sheets.
Other
Funds that do not fit under any other definitions found in this list.
“PitchBook is the gold standard for data on privately-backed companies and the VC and PE ecosystem. Over the years they have expanded their coverage to provide excellent data on public companies and M&A as well, and have vastly increased the coverage on international companies. The platform is intuitive and easy-to-use and customer service is top-notch.”
Source : G2.com
Profiles
You can find the Fund Category and Fund Strategy in the General Information section of a Fund profile.
Screeners
You can search by Fund Strategy on the Fund Criteria tab of Investors & Funds screeners. Selecting a Fund Category will select all strategies within that category. Start with Learn the basics of creating a screener if you are new to PitchBook searches.
Search results
You can find Fund Category and Fund Strategy in the Investors & Funds search results on the Funds search results tab.
Download templates
You can find Fund Strategies in various download templates such as the templates from the Investors and Funds search results tabs.
Pivot table
You can pivot by Fund Category and Fund Strategy in Funds pivot tables. Learn how to display search results in a pivot table and select your pivot view in our article Creating a pivot table using search results.
