Investors' due diligence on PE institutions means that investors can learn about the investment history and ability of PE institutions through as many channels as possible, such as the working background of managers, the establishment history of PE institutions, investment experience, investment projects, profitability, etc., so as to make up for their imbalance in information acquisition and better judge investment risks.
At present, the LPs of most RMB funds in China have not completely adjusted the managers of PE funds (commonly known as "GP"). The main reason is that most LPs lack professional knowledge, often listen to friends' introductions, participate in various PE fundraising roadshows, or decide whether to vote or not based on their trust in the bank's wealth management department. As far as LP is concerned with GP, we should not only care whether this PE has a stable team and rich historical investment experience, but also care whether LP has core advantages to enable it to have a wide range of project channels, identify project capabilities and compete for the competitiveness of advantageous projects.
From the above aspects, for investors, at least the following points are necessary and easy to obtain accurate and true information:
2. Values are mainly to understand the value orientation, behavior, competitive advantage and judgment of future development direction of PE fund managers. The partnership PE fund is based on investors' basic trust in managers. Whether the manager can manage the fund diligently and responsibly is based on GP's value orientation, investment background and its own competitive advantage.
In addition to being directly known by managers in PE fund roadshows, this information can also be obtained through various public and non-public channels.
Open channels mainly include government departments, networks, media and various trade associations. The government management departments are mainly the Industrial and Commercial Bureau and the National Development and Reform Commission, because no matter what kind of PE funds are always registered in the Industrial and Commercial Bureau, more than 500 million funds must be filed in the National Development and Reform Commission. In the Industrial and Commercial Bureau or the National Development and Reform Commission, you can basically find out the background of these PEs, including whether you really participated in the investment of some enterprises in historical investment, and basically you can filter out many fake PEs and fool PEs. Trade associations can also learn a little information.
Non-public channels are mainly PE investors, enterprises that have invested and partners. These non-public listed institutions or individuals are the best channels to understand the real situation of PE, because they all have practical cooperation with PE. But the difficulty is that these institutions or individuals are beyond the reach of any LP.