New Fund Offer - NFO

Categories: Banking, IPO

A mutual fund decides that there's a big market for a tech sector fund. It'll focus on three component parts: telecommunications infrastructure, consumer software applications, and security.

So they outline the universe of the few thousand companies around the globe in which they might invest. And they create an offering memorandum, a red herring, and other docs. Then they go on a roadshow with a new fund offer, and hope that brokers buy in and sell to their clients. When they're done, hopefully the stork has delivered a brand new bouncing stream of fees to the managers.

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