Direct Placement

Direct sale of securities to one or more professional investors. Such securities may or may not be registered with the Securities and Exchange Commission. They may be bonds, private issues of stock, limited partnership interests, mortgage-backed securities, venture capital investments, or other sophisticated instruments. These investments typically require large minimum purchases, often in the millions of dollars. Direct placements offer higher potential returns than many publicly offered securities, but also present more risk. Buyers of direct placements are large, sophisticated financial institutions including insurance companies, banks, mutual funds, foundations, and pension funds that are able to evaluate such offerings. Also called private placement.