Private equity funds can either take the form of funds for collective investment, as provided for in Act No. 128/2011, on Undertakings for Collective Investment in Transferable Securities (UCITS), Investment Funds and Institutional Funds, or funds in enterprise form. In recent years, it has become common in Iceland for such funds to be established as limited partnerships. No special legal provisions apply to private equity funds, but, characteristically they generally invest in unlisted equities of well established companies with the aim of implementing various transformations to increase the value of the investment.
Private equity funds are often established based on the assumption that they will be wound up within a set time frame (pre-determined lifetime); however, this is not always the case. Within the fund's lifetime, there is a defined investment period during which the fund identifies suitable investments and draws on subscribed capital from its shareholders followed by a transformation period during which the fund implements its value-enhancing changes for the companies it has invested in.
- Horn II - Private Equity Fund
- Icelandaic Tourism Fund I
- Brunnur vaxtarsjóður - Venture Capital Fund