Core Viewpoint - The recent surge in the Hong Kong IPO market and steady progress in A-share listings, particularly among leading technology companies on the Sci-Tech Innovation Board, has reignited interest in specialized funds among investors [2][4]. Group 1: Market Dynamics - The popularity of specialized funds has increased due to the underperformance of blind pool funds and a growing focus on underlying assets by LPs [2][3]. - Specialized funds are characterized by smaller scales and targeted investments, making them more appealing to LPs seeking lower commitment amounts and higher certainty [2][6][7]. - The IPO market has seen significant activity, with a total of 191 IPOs in A-shares and Hong Kong from January to November 2025, involving 1,114 investment institutions and an average IRR of 47.14% [4]. Group 2: Characteristics of Specialized Funds - Specialized funds emphasize certainty by pre-defining investment projects, primarily targeting mature companies with growth potential [6]. - They provide LPs with more control and project selection options compared to blind pool funds, which enhances decision-making participation [6]. - The establishment and initiation of specialized funds are quicker due to simplified documentation and reduced due diligence requirements [6]. Group 3: Challenges and Considerations - Despite their advantages, specialized funds face challenges in fundraising, particularly due to the scarcity of quality projects and the competitive nature of popular sectors [9]. - The inability to expand funds or redeem investments post-formation limits the flexibility of specialized funds, potentially increasing operational costs [7][10]. - The risk profile of specialized funds can be higher in certain sectors, as they are more susceptible to market shocks compared to blind pool funds, which can diversify their investments [8][10].