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As partnerships private equity funds and hedge funds generally qualify as flow-through entities (also known as pass-through entities). This means that rather than being subject to taxation themselves (as corporations are) they pass their entire tax liability onto their investors escaping double taxation. Limited partners will receive a Schedule K-1 from the fund each year. It breaks down their share of the fund’s profits or losses which they must then report on their individual tax returns. Reviewed by. Initial Public Offerings (IPOs): Listing portfolio companies on public stock exchanges enabling investors to sell their shares to public market investors. Strategic Acquisitions: Selling portfolio companies to strategic buyers such as larger corporations or competitors seeking to acquire technology talent or market share. Secondary Sales: Transferring ownership stakes in portfolio companies to other investors through secondary market transactions providing liquidity to existing investors. Rec |
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