2. The fund is an expanded partnership investment.
Suppose you have a sum of money and want to invest in bonds, stocks and other securities to increase the value, but you have no energy, professional knowledge and little money, so you want to invest in partnership with several other people and hire an investment expert to operate the assets invested by everyone to increase the value. But in this case, if several investors consult with investment experts at any time, it will not be chaotic, so they will recommend a leader who knows best to take the lead in this matter. Give him a certain proportion of the assets of the partnership on a regular basis, and he will pay the service fee to the master. Of course, he will take the lead in making arrangements for big and small things, including running errands from house to house, reminding the master of risks at any time, and regularly announcing the investment profits and losses to everyone. He can't be busy in vain, and the money in the commission also has his service fee. These things are called partnership investment. Enlarge this partnership investment model by 100 times and 1000 times, which is the fund.
This kind of private-private partnership investment activity belongs to private equity fund if a complete contract is established between investors (in China, it has not been officially recognized by the relevant laws and regulations of the national financial industry supervision).
If this partnership investment activity is approved by the national securities industry management department, and the lead operator of this activity is allowed to make a public offering to attract investors to join the partnership investment, this is the issuance of publicly offered funds, which is a common fund now.