How to raise funds to establish a private equity fund company

Private equity funds are the behavior of qualified investors raising funds within a specific scope. The issuance of private equity funds usually requires corresponding qualifications and supervision by securities regulatory agencies. Below is the editor’s collection of how to raise funds to establish a private equity fund. Welcome to read and share. I hope you will like it.

How to raise funds to establish a private equity fund

First of all, private equity funds raise funds through non-public means. In the United States, public funds such as mutual funds and pension funds generally advertise on the public media to attract customers, while according to relevant regulations, private equity funds are not allowed to use any communication media to advertise. The so-called "reliable investment information", or direct knowledge of the fund manager to join.

Secondly, in terms of fundraising targets, private equity funds only target a small number of specific investors. Although the circle is small, the threshold is not low. For example, in the United States, hedge funds have very strict regulations for participants: if you participate in the name of an individual, your personal annual income in the past two years must be at least US$200,000; if you participate in the name of a family, your family’s income in the past two years must be at least US$300,000. Above USD; if participating in the name of an institution, its net assets must be at least USD 1 million, and there are corresponding restrictions on the number of participants. Therefore, private equity funds have highly targeted investment goals and are more like investment service products tailored for middle-class investors.

Thirdly, unlike the strict information disclosure requirements of public funds, private equity funds have much lower requirements in this regard. In addition, government supervision is correspondingly looser. Therefore, the investment of private equity funds is more hidden and the operation is more complicated. It is more flexible and has a correspondingly greater chance of obtaining high-yield returns.

In addition, a significant feature of private equity funds is that fund sponsors and managers must invest their own funds in fund management companies. The success of fund operations is closely related to their own interests. Judging from the current international practice, fund managers generally hold 3% to 5% of the shares of the fund. Once a loss occurs, the shares owned by the manager will first be used to pay participants. Therefore, the promoters of private equity funds , the manager and the fund are interdependent, and share the same interests of honor and disgrace. This also to a certain extent solves the inherent shortcomings of public funds such as weakened interest constraints on managers and insufficient incentive mechanisms. .

How individuals create private equity funds

1. Private equity funds’ requirements for investors’ financial strength: Requirements for individuals: The investment amount in a single fund should not be less than one million, and the net assets More than 3 million, with an average annual income of more than 500,000 in the past three years. Requirements for institutions: Net assets exceed 10 million. 2. The number of people required by private equity funds: Private equity is private equity because the fund is only open to specific groups of people. The method of fund raising is that the fund sponsor completes the fund raising privately. According to the Securities Investment Fund Law, Company Law, and Partnership Enterprise Law, the number of investors required for partnership and limited company funds is no more than 50; for contractual and joint-stock company funds, the number of investors is no more than 200. 3. Conditions for issuing funds: 1. Only managers who have completed registration with the China Asset Management Association are eligible to issue funds. 2. You can acquire an investment company. After completing the application for a private equity fund license, you can apply for the registration and issuance of fund products. 3. If you don’t want to acquire, you can entrust a manager to issue it. However, because the size of the manager’s organization is different, if you are not familiar with the industry, it will have a direct impact on the interests of investors.

How individuals participate in private equity funds

Choose funds that are consistent with their own investment preferences. For example, for more aggressive investors, they can choose medium- and high-risk funds. For more prudent investors, you can consider low- to medium-risk funds.

Choose funds whose fund managers have strong management capabilities, and the trends of their funds will tend to be better.

Choose funds with low fund valuations. The lower the fund valuation, the smaller the bubble, and the smaller the risk investors bear. At the same time, funds with lower valuations have less room for future growth. larger.

When buying funds, investors should set stop-loss and stop-profit positions to control their risks.

Who can buy private equity funds?

Private equity funds are an investment tool for high-net-worth individuals. Therefore, wealthy high-net-worth individuals are often the main buyers of private equity funds. group.

High-net-worth individuals invest heavily in private equity funds for the following reasons.

First of all, high-net-worth individuals have certain advantages in wealth accumulation. They have high investment capabilities and abundant sources of funds.

This enables them to invest in private equity funds, and also means that they have a relatively high risk tolerance.

Secondly, private equity funds have a higher risk-return ratio than traditional investment channels.

For high-net-worth individuals pursuing high returns, private equity funds provide more investment opportunities and greater return potential, thus attracting their attention and purchases.

Finally, private equity funds have certain advantages in investment strategies and flexibility.

High-net-worth individuals usually have strong personalized needs in financial planning, and they hope to achieve personalized investment goals and risk control through private equity funds.

Therefore, the flexible investment strategies and product features of private equity funds can meet their needs for personalized investment.

What is a private equity fund?

Legal analysis: The definition of private equity funds refers to investment funds established in the People’s Republic of China by raising funds from investors in a non-public manner. . Investment in private equity funds includes the purchase and sale of stocks, equities, bonds, futures, options, fund shares and other investment targets agreed upon in investment contracts.

Private equity funds are fund financial products that raise funds from qualified investors in a non-public manner and use equity, stocks, bonds, futures options and other qualified assets as investment targets.

Private equity funds refer to securities investment funds that raise funds from specific investors in a non-public manner and target specific investment targets.

Private equity funds are the market makers in the stock market. They plan to wash the market, boost sales and destroy the market, making a lot of money and making a small amount of money. Once you follow or participate, you are on the highway to making money.