Which of the following is NOT listed as a typical source of capital for financial sponsors?

• A. Corporate venture funds
• B. Insurance companies
• C. Pension funds
• D. Endowments

Answer: (A)

The main idea is identifying who commonly funds private equity sponsors. Pension funds, insurance companies, and endowments are classic, long-horizon investors that routinely commit capital to private equity funds because of their size, stability, and diversification needs. Corporate venture funds, however, are the venture capital arms of corporations focused on strategic investments in startups, not typically the standard backers for a PE sponsor’s funds. They may invest in PE funds in some cases, but this isn’t their typical role or the usual source of capital for financial sponsors. That’s why corporate venture funds are the best answer for the item that isn’t a typical source of capital.