Single-Layer SPV
Definition
A special-purpose vehicle structure in which investors buy interests in one vehicle that directly holds the underlying asset, such as pre-IPO shares in a single company. The investor is one entity layer removed from the asset rather than investing through a feeder that invests into another fund.
Why it matters
A single-layer SPV is usually easier to diligence than a feeder structure because the investor has one wrapper, one set of governing documents, and one primary fee layer to analyze. It does not make the asset liquid or risk-free, but it reduces structural complexity and fee stacking.
Common misconceptions
- •Single-layer does not mean direct share ownership; investors usually own interests in the SPV.
- •A simple wrapper can still hold a risky, illiquid, hard-to-value asset.
- •Fee simplicity does not eliminate K-1 timing, transfer restrictions, or exit uncertainty.
Technical details
What to check
Review the SPV operating agreement, fee schedule, transfer restrictions, voting rights, tax reporting, treatment of ROFR events, and whether the SPV directly owns shares or another instrument such as a forward contract.