Hedge Funds (P.I.P.E. Transactions)

 In recent years management of many public companies have utilized P.I.P.E.s (Private Investments in a Public Equity) in order to obtain equity capital to finance growth, acquisitions and working capital.

In a PIPE Transaction, investors typically purchase securities directly from a publicly traded company in a private placement. Depending on the structure of the transaction, this can be done at a premium to or a discount from the market value of the company’s common equity. Since the sale of the securities is not registered with the SEC at the time of the transaction, the securities are restricted and cannot be immediately resold by the investors in the secondary market.

Accordingly, the company will usually agree to register the restricted securities with the SEC in conjunction with the PIPE transaction. Thus, a PIPE transaction can offer the company the speed and predictability of a private placement, while providing investors with a nearly liquid security.

A significant advantage of PIPE transactions compared to traditional public offerings is that they can be completed rapidly. After the closing of the financing transaction, the company and its counsel typically prepare and file the registration statement

There are many types of hedge fund and PIPE investments available. The distinguishing factor between each of these offerings is the due diligence and performance of the funds management. At Jackson, Kohle & Co. we take pride in our approach to these unique opportunities and look forward to building a formidable fund in this burgeoning new business.

For more information on PIPE transactions please visit http://www.friedlandworldwide.com/