Frequently asked questions from investors
What are qualified investor funds?
Investments into qualified investor funds, such as Jet Funds, are not open to the general public. Jet Funds allow investors – most frequently financial institutions and individuals – to take part in much larger investment opportunities than they would be able to achieve by themselves. That means you can invest with us only if you are aware of the risks that accompany investing in the fund and if the investment is appropriate for your financial situation. You must confirm this fact in a declaration even before you invest. Your status as a qualified investor is then confirmed by the fund’s administrator.
What does it mean that Jet Funds are closed funds?
The shares investors own in the fund always correspond to the value of the assets owned (i.e. primarily illiquid ownership stakes in businesses). Therefore, it is not possible for the fund to redeem its own shares at the investors’ request within its investment horizon. If one of the current investors decides to leave the fund, he or she can offer his or her shares for sale in a non-public anonymous auction, which usually is held once annually.
When can I invest into Jet Funds?
The subscription period for the Jet 1 and Jet 2 funds has ended. Both are fully subscribed. The possibility does exist to invest into the funds through an auction, however. If one of the current investors decides to leave the fund, he or she can offer his or her shares for sale in a non-public anonymous auction, usually organized once a year. Nonetheless, we cannot guarantee investors will be interested to divest. If you happen to be interested in investing into Jet 1 or Jet 2 in this manner, please contact us. In future, we also are planning to open additional funds. We expect the Jet 3 Fund to be opened within 3–5 years.
Who are Fund’s investors?
As the Czech Republic’s largest private equity fund open to a broader range of investors, we make it possible for both individuals and institutions to invest with us. More than 100 entrepreneurs and managers invested into the Jet 1 Fund. Over 160 private investors, family investment companies, and such financial institutions as banks, insurance companies, and international asset managers committed to invest into the Jet 2 Fund.
What companies do you invest in?
We invest into small to medium-sized production companies in Europe that we subsequently group into industry platforms. Depending upon the development phase the individual businesses are in, we follow our strategy by means of buy-out, growth, rescue/turnaround, or late-stage venture acquisitions. We maintain portfolio diversification while investing in industrial fields. These include in particular the machine-building and engineering, specialty chemicals, technical textiles, building materials, renewable energy, automotive, aviation, and railroad industries, but we also do not shy away from opportunistic investments.
What is the ownership structure of Jet Funds?
Jet Funds’ general partners are the partners of Jet Investment. They hold 40% of the shares in the Jet 1 Fund, while in the Jet 2 Fund they have 15%. The remaining shares are held by the limited partners, primarily consisting of high net worth individuals as well as domestic and international financial institutions.
When and how do you divest your companies?
We develop the companies in the funds through active management. We agree to sell only at the time of their maximum market potential. Divestments in the funds may occur at any time during a fund’s investment horizon, but most probably in its second half.
How long is Jet Funds' investment horizon?
The investment horizon of the Jet 1 Fund, which was subscribed in 2015, will end in 2022. The investment horizon of Jet 2, which was subscribed in 2018, is planned for 8–10 years. At the end of the investment horizon, only liquid assets (i.e. cash from the sale of companies) will remain in the fund. At that point, the fund will be converted from a closed fund to a SICAV or other form of open fund and enable investors to exit by selling their shares.
What is a capital call?
In signing an investment contract, you undertake to invest an amount of your own choosing. You thereby give permission for Jet Fund to ask for those funds during the investment period through a so-called “capital call”. During the first three years of the investment horizon, there are several capital calls, typically before businesses are acquired. For example, Jet 1 Fund used six capital calls within its investment period. When a capital call is made, you have 30 days to send the requested amount to the fund. Once you have done so, you receive a proportionate number of shares in the fund in dematerialised form. In addition, after each capital call, you also receive an account statement from which you can determine the precise number of shares you hold in the fund.
Can I leave Jet funds during the investment horizon?
We are of course prepared for that possibility. Even though Jet 2 Fund is a closed fund, we honour your wish to leave the fund. For this purpose, we have prepared so-called “auctions” for you, which are held at least once a year and by which we can assist you in divesting your shares. A necessary condition for selling your shares, of course, is that there be interest from one or more potential buyers. Unfortunately, we cannot guarantee divestments.
What is an auction and how does it work?
Do you need to exit Jet Funds before the end of their investment horizon? During the annual auction, Jet Investment connects you anonymously with investors who are interested in buying your shares. You can transfer your shares either to current investors within the fund or to new investors who satisfy the legal requirements of qualified investors. If you and your counterparty reach a deal through us, only then will we reveal your identity and that of your counterparty. We will handle all administration related to the sale of the shares and will transfer your obligations to the new investor for you.
Private equity glossary
Investments into small companies at the phase of their formation. It constitutes a bridge between the initial investment by the company’s founder(s) and an entry of venture capital. Typical angel investors are individuals close to the company’s owners.
A call from an investment company for the investor to deposit the promised investment into the fund. The sum of all capital calls may not exceed the total amount of the investor’s capital commitment.
Collected capital of institutional investors (e.g. pension funds, insurance companies, banks, investment funds, funds of funds, and family offices), as well as high and very high net worth individuals used for direct financing of companies not publicly traded on any stock exchange.
General partner (GP)
The general partner is the manager/owner of a fund with potentially unlimited rights to act concerning that fund. He or she is responsible for managing and administering investments and, for doing so, he or she is entitled to a management fee and a percentage of the fund’s return, the amount of which is established by the fund’s bylaws.
Limited partner (LP)
A limited investor in a private equity fund (also termed a silent partner) has only limited rights in matters concerning the fund’s management and does not participate in its operations. He or she is entitled to receive returns from the fund’s investments.
Private equity fund
A fund pooling the investments of institutional investors, individual investors, and fund managers. The purpose of a private equity fund is to invest capital into companies that are not publicly traded and to generate profit by developing them and subsequently selling them off.
Private equity & venture capital
Venture capital consists of funds invested into companies in the early stages of their development. Private equity capital comprises investments into companies in the late stages of their development as well as in mature companies.
Results demonstrating a fund’s long-term profitability and rate of return
Total amount an investor has undertaken to invest into a fund. This amount is invested not all at once but gradually based on capital calls from the fund’s manager at such times as the fund intends to buy new companies.
Earnings before interest, tax, depreciation, and amortization. It is an indicator of a company’s operating performance.
Investments during the initial phase of their development into smaller companies with high growth potential (start-ups) and needing financial capital for introducing a product to the market, developing an existing product or its marketing. Typical investors are venture funds.
Late stage venture
Investments into relatively developed companies with their own products but which do not have established corporate management structures for their further development as well as sufficient financial or strategic capital. Investments usually comprise managerial and financial support for new products, technologies, or general company expansion. Typical investors are private equity funds.
Investments into mature companies with established positions in their markets needing financial resources for their own development, expansion into new markets, or financing of acquisitions. Typical investors are private equity funds.
Purchase of a majority ownership share in a company
The process of acquiring a property or group of assets identified in advance. In the case of a private equity fund, this usually entails taking over a company.
Growth & dividend part of the portfolio
A combination of two fundamental parts of a portfolio characterized by returns of different types in order to diversify investment risk. The dividend part of the portfolio consists of prosperous businesses offering attractive and stable dividends. The growth part of the portfolio comprises companies with substantial potential for restructuring and subsequent growth.
The ability to convert assets into cash or the speed at which this can be achieved
Turn-around / rescue
Investment into companies that are performing poorly in the short term with the objective of consolidating and restructuring their operations. Liquidation processes are also permissible in certain cases.
Distribution of the portfolio’s holdings across various investment instruments, industries or geographies, and/or company types with the objective of reducing investment risk
The difference between incoming cash and cash flowing out for a certain period
A comprehensive examination of a company that precedes an investor’s entering the target company. Among other aspects, it includes a deep and detailed financial, managerial, and technical audit.
A pre-defined procedure followed upon reaching an investor’s strategic objective or a process for when the determined strategy fails. Typical exit strategies may include selling the company to a strategic partner, merger with another company, stock exchange flotation, or closing down the company.
IRR (internal rate of return)
Internal rate of return is a highly objective indicator of an investment’s performance that measures the investment’s returns and value over time relative to the invested amount.
Paid-in capital (PIC)
The proportion of capital called up relative to the total fund capital subscribed
Distributed value to paid-in multiple (DVPI)
A ratio of the cumulative amount of a fund’s distribution to the amount of capital called up
Residual value to paid-in multiple (RVPI)
A ratio of a fund’s capital value to the amount of capital called up
Total value to paid-in multiple (TVPI)
A ratio of the sum of a fund’s capital value and the cumulative amount of the fund’s distribution to the amount of capital called up. It is used as an indicator of a fund’s performance before the end of its lifetime
p. a. (per annum)
on a yearly basis