Blind pool

(redirected from Blind Pools)
Also found in: Dictionary.

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.

Mentioned in ?
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.
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.
The blind pool initially aimed to raise up to $1 billion, said another person familiar with the situation.
A recent phenomenon in the REIT sector that may not have staying power is, however, so-called blind pool REITs --those that don't own assets yet, but are instead trying to raise money based on the reputation of the managers and the offering plan.
They are creating blind pools to roll up existing operators or facilities and to fund new acquisitions.
Later that same year, in September of 1989, NASAA issued to the House of Representatives' Subcommittee on Telecommunications and Finance "The NASAA Report on Fraud and Abuse in the Penny Stock Industry." That report warned against blank-check blind pools and noted that ZZZZ Best, in which banks and investors lost about $70 million in a massive stock fraud scheme, went public in 1986 through a merger with a Utah blank-check blind pool.
Blind Pools. Blind pools are created when funds are collected before a particular property has been selected.
Asked whether blind pools or deal-by-deal fundraising are more appropriate to the region, Murphy noted, "The key is flexibility.