Blind Pool

  

Marco. Polo.

A place at your local rec center where a lot of accidents take place. It's also a type of investment fund.

A bunch of people get together and decide they're going to invest together. They set up a partnership, and everyone cuts a check. Now there's a large pool of money to invest. But they never really decided what to invest in.

This situation represents a blind pool. It's a bunch of money that gets gathered together, but with no specific investment goal in mind (at least at the outset).

So why would anyone do it? Sometimes it has to do with the person putting together the fund. It could be a famous investor, or a new fund formed by a well-established firm.

Cousin Jack is a wizard at finance. So, we'll just give him a few thousands of dollars to invest for us...we just want to piggyback on his stock picks. Aunt June, Uncle Perry, Mom, and Elsa Jean all do the same thing. We've just set up a blind pool for Cousin Jack. We don't know what he'll do with the money, but we have a lot of confidence that he'll do a good job.

Related or Semi-related Video

Finance: What is pooling: investment/int...3 Views

00:00

Finance allah shmoop what is pooling Well it's aggregating no

00:08

no aggregating yeah Throwing in cash together partnering pooling interests

00:14

in an investment simply refers to two or more players

00:17

getting together to invest their money in whatever form mutual

00:21

funds are are pooled investment So our index funds hedge

00:24

fund bond funds etfs reads mlps any uh pretty much

00:28

and well every other investment vehicle that can scale to

00:31

allow for two or twenty or two million investors to

00:34

all come together and invest well Why would people want

00:38

to do this scale or rather synergies of costs from

00:41

scale Whether you have one investor or ten thousand you

00:45

need to file papers and there are usually pretty much

00:48

always lawyers involved and accountants and other wall street gum

00:52

sucking gadflies and the marginal additional cost of servicing ten

00:56

thousand pooled investors is only somewhat more than servicing won

01:00

So in many cases pooling makes a lot of sense

01:03

when investors interests are generally aligned and when they're not 00:01:07.229 --> [endTime] around there's trouble

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