Blind pool

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Blind pool

A limited partnership that does not announce its intentions as to what properties will be acquired.

Blind Pool

A limited partnership without any stated investment goals. The blind pool gathers money from investors, who then trust the general partner(s) and managers of the pool to invest wisely. Blind pools have a shaky reputation as the result of some fraud scandals in the 1980s and 1990s. They are most common toward the end of a prolonged bull market, in which investors do not engage in the appropriate due diligence and risk analysis.

Legitimate blind pools usually exist for reverse acquisition. In these cases, the general partner(s) choose not to reveal their purposes for fear of scaring away potential investors, especially if the reverse acquisition is high-risk. See also: Transparency.

blind pool

An investment vehicle that raises capital from the public without telling investors how their funds will be utilized. These pools are sometimes used to acquire and convert private companies into public companies without going through a lengthy registration process. Blind pools are risky investments in which investors should pay particular attention to the background and knowledge of the promoters and officers. Shares in these investment vehicles are often sold to the public at relatively low prices.

Blind pool.

If the general partner of a limited partnership does not say which investments the partnership will make, the investment is known as a blind pool.

In a blind pool equipment leasing partnership, for example, you don't know what type of equipment the partnership is planning to acquire for leasing, and in a blind pool real estate investment trust (REIT), you don't know which properties the partnership will purchase.

When you invest in a blind pool limited partnership, your evaluation of the partnership's prospects is based on the investment track record of the general partner. In contrast, in a specified pool limited partnership, you can assess the partnership's prospects on a more concrete analysis of the costs and projected revenues.

However, there is no evidence that the average performance of blind pools differs significantly from the performance of comparable specified pool partnerships.

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References in periodicals archive ?
GPs remain optimistic towards continued long-term growth prospects in the Mena region; however, as the industry enters a new investment cycle and LPs increasingly consider direct or co-investment options as a viable alternative to blind pool investing, the focus on exits is critical," said Chris Carney, Assistant Director, Deloitte Corporate Finance Ltd in the Mena region.
One of the most distinguishing characteristics of a SPAC, which separates it from a traditional blind pool, is the investor safeguards.
Other firms that have planned to raise bank-focused blind pools include Blackstone Group LP and Sageview Capital LP.
The New York-based firm is raising a blind pool of capital that will support a new bank being formed by a duo of former Countrywide Bank executives, said people familiar with the situation.
Apollo started working on the blind pool about a year ago, and has hired Perella Weinberg Partners LP as the placement agent, said one person with knowledge of the matter.
One source called blind pools a "flash-in-the-pan" trend.
As more blind pools raised capital, few could put it to work right away and the market cooled to further offerings.
A number of firms that are seeking to become REITs are so-called blind pool entities, meaning they don't own assets yet.