In our practice, we often come across investment structures in which a group of investors decides (or are approached) to raise capital, in order to invest it together into Slovak and foreign target companies. Most often, these structures look like this:


In both structures, investors most often collect money into newly established project companies (SPVs), in which they acquire business shares or shares according to the proportions of the amount of their investments. SPVs then invest the collected funds into one or more target companies, whether in the form of equity, debt (usually convertible debt) or combined investment. Sometimes SPV invests in several target companies, other times a separate SPV is established for each investment.

In exchange for the provided investment, SPV acquires an ownership interest in the target company and, in most cases, the right to nominate a member to the supervisory board, through which investors exercise negative control over the target company’s business. The investment strategy of these structures is the further business development of the target company and the subsequent exit through the sale of ownership interest in the target.

Are such structures subject to collective investment regulation? Do they need a license or registration with the Slovak National Bank (NBS) for their activities? Sometimes yes, other times not. It depends on several factors, which we analyzed in more detail in our comprehensive article available here.