1. Public offering:

1. Advantages:

(1) Public offering is aimed at mass investors and raises a large amount of funds, which is suitable for issuing a large number of securities and raising a large amount of funds.

(2) The public offering has a wide range of investors, which can prevent the securities from being maliciously hoarded or manipulated by a few people in the future.

(3) In the public offering of securities, you can apply for listing, which can enhance the liquidity of securities and enhance the issuer's social reputation.

2. Disadvantages

It takes a long time for registration and approval, and the issuance cost is high, and the issuance process is complicated.

2. Private placement:

1. Advantages:

(1) Private placement funds are generally closed-end partnership funds and are not listed and circulated. During the period of fund closure, partnership investors can't withdraw funds at will, and the closure period is generally 5 to 1 years, so the operation period is stable and there is no pressure to redeem funds.

(2) Compared with the strict information disclosure requirements in Public Offering of Fund, the requirements of private equity funds in this respect are much lower, and the government supervision is relatively loose, so the investment of private equity funds is more hidden and professional, and the return on income is usually higher.

(3) The success of fund operation is closely related to the fund manager's own interests, so the fund manager has a strong sense of professionalism and can attract specific investors with his unique and effective operating concept. The cooperation between the two parties is based on a kind of trust and contract, so there is little moral hazard.

(4) The investment target is more targeted, and the investment service products can be customized for customers to meet their special investment requirements. For example, Soros's quantum fund not only invests in the global stock market, but also invests heavily in foreign exchange and futures, creating a high rate of return.

(5) The organizational structure is simple, the operating mechanism is flexible, and the freedom of daily management and investment decision-making is high. Compared with the complicated bureaucracy, private equity funds have obvious competitive advantages at the critical moment when opportunities are fleeting.

2. Disadvantages:

(1) The stock that is not publicly issued has poor liquidity and cannot be publicly transferred and sold in the market; Due to the non-public way to raise funds, the entry threshold is high, and the target is generally a few specific investors. In this way, if investors withdraw their funds or have other major changes, the risks are also greater.

(2) Similarly, because the target is a small number of investors, the information disclosure is relatively loose, and there is a danger of being bargained and controlled.

Extended information:

Organizational form of private placement:

1. Corporate style:

Corporate private placement funds have a complete corporate structure, and their operation is more formal and standardized. Corporate private equity funds can be set up conveniently in China. Semi-open private equity funds can also operate conveniently in a flexible way, and their investment strategies can be more flexible without strict approval and supervision. For example:

(1) Establish an "investment company" whose business scope includes securities investment;

(2) The number of shareholders of the "investment company" should be small, and the capital contribution should be relatively large, which not only ensures the nature of private placement, but also has a large capital scale;

(3) The funds of the "investment company" are managed by the fund manager. According to international practice, the manager collects the fund management fee and benefit incentive fee, and enters the operating cost of the "investment company";

2. Contract fund:

The organizational structure of contract fund is relatively simple. The specific methods can be as follows:

(1) As the fund manager, the securities company selects a bank as its custodian;

(2) raise a certain amount of money to start operation, open it once a month, announce the net value of the fund to the fund holders, and redeem the fund once;

(3) In order to attract fund investors, the handling fees should be reduced as much as possible. As fund managers, securities companies charge a certain amount of management fees according to their performance. Its advantage is that it can avoid double taxation, but its disadvantage is that it is difficult to avoid the approval and supervision of the securities management department in its establishment and operation.

3. Virtual private equity fund:

Virtual private equity fund looks like entrusted financial management on the surface, but it actually operates as a fund. For example, when the virtual private equity fund is set up and raised, it is ostensibly to sign a trust financing agreement with each customer, but these trust financing accounts are combined to operate as a fund, and when buying and redeeming fund units, it is settled according to the net value of the fund. The specific methods can be as follows:

(1) Each fund holder opens a separate sub-account in his own name;

(2) The fund holders * * * jointly contribute to form a master account;

(3) As the manager of the fund, the securities company manages all accounts in a unified way, and all accounts calculate the net value of the fund unit in a unified way;

(4) The securities company tries to make the actual market value of each account equal to the market value calculated according to the net value of the fund unit. If they are not equal, the fund difference between the main account and the sub-account will be transferred to balance at the time of redemption.

4. Combination:

In order to give full play to the advantages of the above three organizational forms, a fund portfolio can be set up to combine several organizational forms. There are four types of combined funds:

(1) the combination of corporate and virtual funds.

(2) the combination of corporate style and contractual style.

(3) the combination of contract and virtual.

(4) the combination of corporate, contractual and virtual.

5. Limited partnership:

Limited partnership is the main organizational form of private equity funds in the United States.

On June 1, 27, China's "Partnership Enterprise Law" was officially implemented, and a number of limited partnership enterprises were established one after another. These limited partnership enterprises mainly concentrated in the fields of equity investment and securities investment.

6. Trust system

Equity investment or securities investment through trust plan is also a typical form of sunshine private placement.

Baidu encyclopedia-private placement

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