An investment company is a company whose main business is holding securities of other companies purely for investment purposes. The investment company invests money on behalf of its shareholders who in turn share in the profits and losses.
In United States securities law, there are at least four types of investment companies:
- Open-End Management Investment Companies (mutual funds)
- Closed-End Management Investment Companies (closed-end funds)
- Hedge Funds
- UITs (unit investment trusts)
A fifth and lesser-known type of investment company under the Investment Company Act of 1940 is a Face-Amount Certificate Company.
Also popular are private investment funds, which are simply private companies that make investments in stocks or bonds, but are limited to under 100 investors, are private and are not regulated by the SEC. These funds are often composed of very wealthy investors.
Famous quotes containing the words investment and/or company:
“There is something fascinating about science. One gets such wholesale returns of conjecture out of such a trifling investment of fact.”
—Mark Twain [Samuel Langhorne Clemens] (1835–1910)
“But in the reception of metaphysical formula, all depends, as regards their actual and ulterior result, on the pre-existent qualities of that soil of human nature into which they fall—the company they find already present there, on their admission into the house of thought.”
—Walter Pater (1839–1894)