Nanjiang county lawyer
Longquanyi district lawyer
Yangdong county lawyer
Lawyer Guang Ningxian.
Bobai county lawyer
Hanjiang district lawyer
In recent years, with the continuous development of the financial industry, there are more and more investment channels. P2P and equity investment are the preferred investment channels for investors. Among them, the private equity investment market is expanding day by day, and many investors are aiming at the rich returns of this market. But the appearance of high income also means taking huge risks. What are the risks of private equity investment funds? Bian Xiao will give you a detailed introduction in the following content.
First, the risks brought by value assessment.
In the operation of private equity investment funds, the value evaluation of the invested projects determines the final equity ratio of investors in the invested enterprises, and too high evaluation value will lead to a decline in the return on investment. However, due to the poor liquidity of private equity investment, irregular cash inflow and outflow in the future, high investment cost and great uncertainty in future market, technology and management, investment valuation risk has become one of the direct risks of private equity investment funds.
Second, intellectual property risks.
This is of special significance to scientific and technological enterprises. Private equity investment, especially venture capital, values the core technology of the invested enterprise. If the ownership of the core technology is flawed (such as the invention of the technology by the entrepreneur at the original employer), it will obviously affect the entry of venture capital, and even bear the responsibility for breach of contract or contracting negligence. For this kind of risk, enterprises must confirm the ownership of core technology through professional evaluation.
Third, the risks brought by principal-agent
In private equity investment funds, there are mainly two levels of principal-agent relationship:
1. Principal-agent relationship between investment fund managers and investors,
2. Principal-agent relationship between private equity investment funds and enterprises.
3. The principal-agent problem is mainly caused by imperfect laws and regulations related to private equity investment funds and low information disclosure requirements. This can't rule out the infringement, breach of contract or violation of the obligations of good managers by some bad private equity investment funds or fund managers, such as black-box operation, excessive trading, reverse operation, etc., which will seriously infringe on the interests of investors.
4. Principal-agent problem is mainly moral hazard problem. Because of the information asymmetry between investors and financiers, the interests of investors as agents are inconsistent with those of investors, which leads to moral hazard in principal-agent and may damage the interests of investors. With the help of professionals, we can make a standardized investment and financing contract and clarify the rights and obligations of both parties, such as the choice of investment tools, the arrangement of investment stages and the allocation of board seats of investment enterprises, which can prevent this risk to a certain extent.
Four. Risks in the exit process
China's main board market has strict listing standards, which have strict requirements on the total share capital of listed companies, the amount of share capital subscribed by sponsors, the operating performance of enterprises and the proportion of intangible assets. It is difficult for small and medium-sized enterprises to land on the main board market, and the newly established GEM market is "too many porridge" to meet the listing needs of enterprises; The unclear nature and function of the property rights trading market and the lack of unified, transparent and scientific trading mode and unified supervision undoubtedly increase the exit risk of specific private equity investment fund investors.
To sum up, the risks of private equity investment funds exist in many aspects, including value evaluation, intellectual property rights, principal-agent and various risks in the process of withdrawal. China's regulatory system for such investments needs to be improved. Investors must be cautious when investing in this area, and make investments after fully understanding the market and operational procedures to avoid huge property losses.
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