The latest development trend in the world is to set up sovereign wealth funds and set up professional investment institutions that are usually independent of the central bank and the Ministry of Finance to manage these funds. The principles of commercialization, specialization and independence should be the key to the establishment of China's sovereign wealth fund.

The so-called sovereign wealth, corresponding to private wealth, refers to the public wealth accumulated by a government through specific tax and budget distribution, renewable natural resources income and balance of payments surplus, which is controlled and dominated by the government and usually held in foreign currency.

Traditionally, the management of sovereign wealth is very passive and conservative, and its impact on domestic and international financial markets is also very limited. In recent years, with the soaring international oil price and the expansion of international trade, sovereign wealth has increased rapidly, and its management has become an increasingly important issue. The latest development trend in the world is to set up sovereign wealth funds and set up professional investment institutions that are usually independent of the central bank and the Ministry of Finance to manage these funds. By the end of 2006, the total assets managed by global sovereign wealth funds reached about10.5 trillion to 2.5 trillion US dollars, most of which were distributed in oil-exporting countries and export-oriented economies.

With the rapid increase in the number and scale of sovereign wealth funds, the investment management style of sovereign wealth funds has become more active. Its asset distribution no longer focuses on G7 fixed-rate bonds, but focuses on global diversified asset portfolios including stocks and other risky assets, and even extends to non-traditional investment categories such as foreign real estate, private equity investment, commodity futures and hedge funds. Sovereign wealth funds have become increasingly active and important participants in the international financial market.

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What is a private equity fund?

The so-called private equity fund refers to a fund set up by private placement to raise funds for a few institutional investors. Because the sale and redemption of private equity funds are conducted through private consultation between fund managers and investors, they are also called funds raised from specific targets.

Compared with Public Offering of Fund such as closed-end funds and open-end funds, private equity funds have very distinct characteristics, which makes private equity funds have incomparable advantages in Public Offering of Fund.

First, private equity funds raise funds in a private way. In the United States, children's funds and pension funds in Public Offering of Fund generally attract customers by advertising through public media. According to relevant regulations, private equity funds are not allowed to use any media to advertise, and their participants mainly join through so-called "reliable investment information" or direct knowledge of fund managers.

Secondly, in terms of fundraising targets, private equity funds are only targeted at a few specific investors, and the circle is small but not low. For example, in the United States, hedge funds have very strict regulations on participants: if they participate in the name of individuals, their annual income in the last two years will be at least $200,000; If you participate in the name of the family, the family's income in the past two years is at least 300,000 US dollars; If you participate in the name of an institution, its net assets will be at least $6,543,800+0,000, and the number of participants will be limited accordingly. Therefore, the investment goal of private equity funds is very strong, which is more like an investment service product tailored for middle-class investors.

Third, unlike Public Offering of Fund's strict information disclosure requirements, 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, the operation is more flexible, and the chances of obtaining high returns are correspondingly greater.

In addition, a notable feature of private equity funds is that fund sponsors and managers must invest their own funds into fund management companies, and the success of fund operation is closely related to their own interests. Judging from the current international practice, fund managers generally hold 3%-5% of the shares of the fund. In case of loss, the shares owned by the manager will be used to pay the participants first. Therefore, the promoters, managers and funds of private equity funds are as close as lips and teeth, and honor and disgrace are integrated with the interests of * * * *, which also solves the inherent weakness of managers' interests and incentive mechanism in Public Offering of Fund to some extent.

A public offering is a public offering. Publicity has two meanings: the first is that you can advertise and raise money from all the people you know and don't know. The second is that the number of proposed objects is relatively large, for example, it is generally defined as more than 200 people.

Private placement is private placement or private placement. In private, it means: first, no advertising. Second, it can only be raised from specific objects. The so-called specific target has two meanings, one is that the other party has money and certain risk control ability, and the other is that the other party is a specific industry or a specific category of institutions or people. Third, the number of private investors is generally small, such as less than 200.

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What is a hedge fund?

Many people may have heard of hedge funds and may remember some hedge funds that played an important role in the Asian financial crisis, but what exactly is a hedge fund?

At present, there is not a very unified definition of hedge fund, and its essence is still nothing more than a * * * mutual fund, but it has the following two particularities:

First, in the organizational form of funds, the number of fund investors (including individuals and institutions) is small. For example, it is a bit like the "rich investment club". In contrast, the general fund is the "public investment club". Funds are mainly privately issued, so most hedge funds belong to private placement.

Second, in terms of investment, it is generally believed that hedge funds are different from other funds, mainly using leveraged financing to invest in financial derivatives such as options and futures. On the one hand, under the same market environment, the income of hedge funds may be obviously different from that of ordinary funds; On the other hand, the amplification of leveraged financing and financial derivatives can increase the expected return, and if used improperly, it may also increase the investment risk.

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