In what type of investment are securities sold directly to institutional buyers?

Private placement is a method of raising capital where securities are sold directly to a select group of institutional or accredited investors, rather than being offered to the general public. This approach allows companies to bypass the lengthy and costly process of a public offering, as the regulations are less stringent for these transactions.

In a private placement, the issuer, typically a company or investment fund, provides a detailed offering memorandum to potential investors, outlining the terms of the investment, associated risks, and financial projections. Institutional buyers, such as pension funds, insurance companies, and hedge funds, often seek such opportunities because they can negotiate better terms and have access to exclusive investment options that are not available in the public market.

The other choices mentioned do not directly relate to the concept of securities being sold to institutional buyers. A fund of funds involves investing in other investment funds rather than directly purchasing securities, blended payments relate to different forms of payment methods, and arbitrage transactions refer to the practice of taking advantage of price discrepancies in different markets for profit.