As broader investment activity across the private markets has increased over the past decade, the use of special purpose vehicles (SPVs) among institutional investors has expanded, too. Compared to three years ago, the annual count of new SPVs on Carta is up 31%. Compared to five years ago, it’s up 116%.
And the size of SPVs is growing—a sign of their growing appeal among private equity and venture capital firms. About 18% of all SPVs on Carta that were formed between 2016 and 2023 were larger than $10 million. Compared to smaller SPVs, these $10 million-plus vehicles are more likely to be managed by private equity or venture capital firms, rather than individuals or investor syndicates.
Macroeconomic shifts are pushing the size of SPVs upward. More and more, LPs and independent sponsors are creating bespoke pools of capital via co-investments to invest alongside a private equity fund in a particular deal, gaining more visibility and autonomy than they can find in a traditional private fund structure. In many cases, these pools of capital are structured as SPVs.
Another shift has been a recent contraction of the PE fundraising environment. The number of new PE funds closed fell by 38% from 2022 to 2023, as rising interest rates drove many LPs to allocate their capital in other places besides the private markets. Raising an SPV for a single deal is typically much easier than raising a whole fund. Because of this smaller size, SPVs are also typically easier for GPs to manage. The lower capital requirement and relative ease of management make SPVs appealing to a particular class of private equity investor, too: emerging fund managers, who often use SPVs to establish an initial track record before raising their first full fund. These emerging managers might strike their own deals, or they might act as independent sponsors and co-invest alongside a larger firm.
This report relies on anonymized data from 442 SPVs with more than $10 million in assets under management formed in the U.S. between the years 2016 and 2023. Each of these vehicles was either formed or managed (or both) with Carta Fund Administration, an all-in-one platform where investors can form, close, and manage their SPVs. Investors can use turnkey templates or customize their own SPV solutions while streamlining their LP communications and receiving ongoing support throughout an SPV’s lifespan.
Highlights
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SPV sizes are trending up: In 2023, the median size of all SPVs on Carta larger than $10 million was nearly $22.6 million. This figure has increased in four straight years, rising from $15.2 million in 2019.
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AUM is concentrated in large SPVs: Less than 10% of the SPVs in this sample manage more than $75 million in assets. But this group of the largest of SPVs accounts for nearly 30% of all capital raised, with nearly $4 billion.
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LP counts can vary widely: Some SPVs invest capital provided by just one or two LPs, while others have dozens of LPs. Among SPVs with between $10 million and $20 million in AUM, the median LP count is 18.
SPV structure
Out of the 442 total SPVs on Carta with more than $10 million in assets that were raised between 2016 and 2023, just over half (50.7%) had somewhere between $10 million and $20 million in AUM. Another 20% were between $20 million and $30 million. At the high end, about 8% of the SPVs were at or above $75 million.
If we look at dollars instead of the number of vehicles, these $75 million-plus SPVs make up a much larger slice of the pie: Nearly 30% of the total AUM in this sample is managed by SPVs larger than $75 million. The $10 million to $20 million interval accounts for another 22% of AUM.
The busiest year for new formation of large SPVs was 2021, when investors formed 177 new vehicles with at least $10 million AUM. Since then, the number of similarly sized vehicles has fallen off considerably. This aligns with a broader slowdown in startup investment activity that occurred in 2022 and 2023, particularly in late-stage companies.
Even as the formation of $10 million-plus SPVs has slowed, the median size of vehicles in this sample keeps going up. It reached about $22.6 million in 2023, up from $20 million in 2022 and $19.8 million the year before that.
There is no standard number—or even range of numbers—for how many LPs contribute capital to an SPV. It depends more on factors such as deal structure, investment size, and profile of the asset.
For example, take the group of SPVs with between $20 million and $30 million in AUM. At the 25th percentile, vehicles in this size interval have just three LPs. At the 75th percentile, they have 44. That’s more of a gulf than a gap—and it still only covers the middle 50 percent of all SPVs raised. Some SPVs have a single LP, and some have dozens and dozens.
Just like the number of LPs, the types of LPs investing in an SPV can vary widely, ranging from individual and institutional investors through sovereign wealth funds and endowments.
SPV fees
Among SPVs with more than $10 million in AUM that were formed in 2023, about 52% charge a management fee. That’s notably lower than the recent norm: Some 69% of all SPVs formed from 2016 through 2023 charged a management fee.
Among the SPVs that do assess a fee, the management fee typically doesn’t vary too much depending on the size of the SPV. Among the $10 million-plus SPVs formed in 2023 that charge a fee, 50% had a fee somewhere between 1.4% and 2%.
These figures are roughly in line with the typical fees charged by SPVs of all sizes. If we expand the sample to include vehicles smaller than $10 million, the median management fee drops from 2% to 1.9%. The 75th percentile fee remains at 2%, and the 25th percentile rises from 1.4% to 1.5%.
Methodology
All 442 SPVs in this report are US-domiciled, direct-investment, and institutional in nature. If an SPV has left Carta, data from that SPV is filtered out from that date onward.
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