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 ?
The blind pool initially aimed to raise up to $1 billion, said another person familiar with the situation.
A number of firms that are seeking to become REITs are so-called blind pool entities, meaning they don't own assets yet.
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.
These fundamentals underpin real estate investment trusts (REITs), which are a blind pool of wealth that jointly own and manage real property assets and redistribute rental receipts and sales proceeds.
Most recently, he served as the Vice President of Capital Raising for Innovo Property Group in New York where his role included raising discretionary blind pool capital for Innovo's GP Fund, as well as LP equity on a deal-by-deal basis.
The newly created Arle fund structure enables investors to acquire assets using Arle's platform on a deal by deal funding basis as opposed to putting up funds in a "blind pool" at the outset.
What makes this batch of public REITs unusual from traditional public offerings, experts said, is that they are so-called "blank check" or "blind pool" entities, meaning the new company does not yet own any assets, but instead is seeking to raise capital based on the reputation of the managers and the offering plan.
The underlying trend continues to be that funds are raised by the major industry players with a confirmed track record, who are able to continue to attract investors to the blind pool [raising money without any stated investment goals] concept.
"It's always been difficult to raise a blind pool fund for land, but now, because homebuilders, primarily public homebuilders, have so much inventory, they've got to get rid of it, and they're marking it down significantly," Berquist said.
Rosenberg, a German native manages a blind pool for 15 to 19 high net worth Europeans.
"Although the structure will be in GP/ LP model, it will not be based on a blind pool of assets.
JLW and Weil Realty jointly manage the IREF, the fourth in a series of blind pool real estate programs sponsored by the bank.