Can Investors Still Pick Individual Deals Inside a Single Fund Instead of Separate SPVs?

Traditionally, sponsors have faced a difficult choice, create a pooled fund where the manager decides how investor capital is deployed, or raise capital separately for each investment through an SPV or syndication. The first model provides operational efficiency but less investor choice, the second gives investors more control but can require repeated entity formation, documentation, onboarding, accounting, and reporting. A customizable fund offers another approach, a sponsor operates one fund while presenting multiple investment opportunities investors can choose to participate in.

How Individual Deals Inside a Fund Work

Instead of creating Deal 1 → SPV 1, Deal 2 → SPV 2, Deal 3 → SPV 3, a customizable fund can be structured as one fund → Deal 1 + Deal 2 + Deal 3 + future deals. The important difference is that investors don't necessarily have to participate in every investment. Avestor's Customizable Fund allows managers to add investments over time and allows investors to select the investments and amounts they want to participate in. For example, imagine a manager has a $5 million multifamily property, a $2 million private credit opportunity, and a $1 million venture investment, an investor interested only in private credit could choose the second opportunity rather than automatically allocating capital across all three, while another investor could choose all three.

How Is This Different From a Traditional Blind-Pool Fund?

A traditional blind-pool fund generally gives the fund manager discretion over how committed capital is deployed within the strategy described in the fund documents, an investor might commit $500,000 without knowing exactly which properties the fund will ultimately purchase, primarily underwriting the manager and investment strategy. A customizable fund changes the investor experience, instead of automatically participating in every investment, investors can be presented with individual opportunities and choose whether to participate, one fund plus multiple opportunities plus investor-level selection, rather than one fund plus one pooled portfolio selected entirely by the manager.

How Is It Different From Using Separate SPVs?

SPVs are commonly used to isolate a particular investment opportunity into its own legal vehicle, for a sponsor raising capital for multiple deals, that can mean repeatedly handling entity formation, offering documents, investor onboarding, accounting, and tax reporting, an operational burden that grows as the number of transactions increases. A customizable fund attempts to centralize much of this infrastructure, instead of creating a new fund vehicle every time a new opportunity appears, the sponsor can add investments to an existing fund structure. Avestor's Customizable Fund allows managers to house multiple investments within one fund and avoid creating new private placement memorandums for every investment, though that doesn't mean every investment automatically has identical legal or economic terms, the structure is specifically designed to provide flexibility at the investment level.

Why Sponsors Want to Avoid the SPV Treadmill

For active sponsors, the challenge with deal-by-deal fundraising isn't necessarily finding investors, it's repeating the same operational process every time a new opportunity appears, creating a new entity, preparing offering documentation, onboarding investors, collecting subscription documents, and preparing tax reporting, only for the next investment to arrive and the process begin again. Avestor's customizable model is intended to reduce this repetition by placing multiple investments under one fund structure, managers can onboard an investor once, collect legal documents once, and provide a single K1 covering the investments held through the customizable fund.

What Does the Investor Experience Look Like?

With a conventional pooled fund, an investor may commit capital and allow the GP to determine which investments are acquired. With a customizable fund, the investor can be presented with available opportunities.

1. Join the fund. Complete the fund's required onboarding and verification process.
2. Review available investments. See available opportunities, including information about each investment and applicable terms.
3. Select an investment. Choose whether to participate and how much capital to allocate, subject to applicable requirements.
4. Track the investment. Monitor the investment through the fund's investor portal and receive relevant reporting.
5. Reinvest or make additional investments. Where permitted, participate in future opportunities without repeating the entire initial onboarding process.

Can One Fund Hold Different Types of Investments?

A key feature of Avestor's Customizable Fund is its ability to support multiple investments and asset classes within the same fund structure, listing multiple asset classes and unlimited investments among its plan features. Depending on the fund's structure and governing documents, a manager could potentially create opportunities involving real estate, private credit, debt, venture capital, private equity, and other alternative investments, particularly useful for managers whose investment strategy changes over time or whose investors want access to different types of opportunities.

What Happens to Tax Reporting?

Under a traditional deal-by-deal structure, an investor participating in several separate entities may receive separate tax documents associated with those investments. Avestor's Customizable Fund is designed to consolidate tax reporting at the fund level, investors can potentially receive a single K1 covering their investments within the customizable fund. This can simplify the experience for investors participating in multiple deals, though the exact tax treatment depends on the legal structure, investment, investor circumstances, and applicable tax rules, fund managers should work with qualified securities and tax professionals when designing the structure.

Customizable Fund vs Separate SPVs

A Real-World Example

Consider a private lender that originates ten loans each year, under a traditional SPV model, the manager could establish a separate vehicle for each loan and raise capital from investors for each opportunity, Investor A participating in Loans 1, 3, 5, and 8, Investor B in Loans 2, 5, and 9, Investor C in six different loans, effectively running ten separate fundraising and administration processes. With a customizable fund, the manager can present all ten opportunities through one fund while allowing investors to choose which loans they want to participate in, preserving deal-level choice without requiring the entire operating infrastructure to restart for every loan, especially relevant for private credit managers, mortgage funds, and hard-money lenders.

When Does a Customizable Fund Make Sense?

A customizable fund can be particularly interesting for sponsors who raise capital repeatedly throughout the year, offer multiple investment opportunities, want investors to choose individual deals, manage multiple asset classes, or want to reduce repeated administrative work. It may be less appropriate for a manager who wants a simple, traditional blind-pool strategy or whose legal and investment strategy requires a different structure, the appropriate structure depends on the sponsor's business model, offering, investor base, and legal requirements.

What Does Avestor Provide?

Avestor combines the Customizable Fund structure with operational infrastructure designed for fund managers, investor onboarding, KYC/AML workflows, investor and manager portals, electronic document signing, bank integrations, capital table management, fund accounting, tax preparation support, and offering publishing. Avestor also works with securities attorneys and banking partners as part of its fund setup process, bringing fund formation, administration, investor management, and capital-raising workflows into a more integrated operating environment.

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