A firm in which investors pool their funds to allow for diversification and professional management. Because individual firms often specialize in particular types of investments, the potential returns and risks vary considerably among firms. Charges to investors—both to acquire shares in a firm and to pay management for operating the company—vary significantly from firm to firm. Also called management company. See also closed-end investment company, conduit theory, management fee 1, mutual fund, performance fee, regulated investment company.