SPV [Special Purpose Vehicle] platform Assure is calling it quits.
Assure aimed to leverage a reduction in cost to creating SPVs by leveraging technology. SPVs are typically utilized for grouping investments in private companies offering a more streamlined legal process in managing the investment. The company claimed that Assure SPVs could include Private Equity, Private Debt, Real Estate, Art, Collectibles, Cannabis, and other alternative assets. Assure touted fees to create an SPV as low as $7000.00. Assets under management were stated at $9.6 billion.
According to the Assure platform:
“As the cost to form and administer SPVs have plunged (from $200K+ to $10K and even less), the kinds of investors using SPVs and the types of assets they invest in have expanded rapidly.
Fewer than 10% of SPVs formed in 2021 collected any management fee. For SPVs that do collect management fees, the average is 4.2% (total, not per year). This is in stark contrast to many traditional fund vehicles, which commonly charge management fees.
SPVs are rapidly becoming the low-cost structure of choice for high-velocity private markets transactions.”
Assure described the popularity of SPVs for venture investors in a post from this past October.
While VCs across the fund tenure spectrum use SPVs (from first-time funds to established managers), VC firms on their second flagship fund are more likely to leverage SPVs https://t.co/9gqE3rdcg4 cc @imkialikethecar @jramphis
— Assure (@assureco) November 29, 2022
Assure has posted a link to a deck outlining how to manage the transfer of existing SPVs, noting that active SPVs must be closed by December 30, 2022. Few details on the decision to shutter the operation are currently available.
