1. Need a lot of capital: According to the actual situation in China, at least100000 capital is needed to participate in the investment.
2. Being able to take higher risks: According to incomplete statistics, only 2-3 private placements succeed for every 10 project, and the rest either quit or don't make money. Private equity investment pursues high returns in high risks. It can be said that PE is inherently "high risk".
3. The term of capital investment needs to be guaranteed: generally, it can reach 3 to 5 years or longer, which belongs to medium and long-term investment.
In what ways can investors participate in private equity investment and share huge returns? What risk factors should investors pay attention to in this process?
There are three main forms of private equity funds under the existing legal framework in China: one is contractual private equity investment funds formed through trust plans; Second, corporate industrial funds specially approved by the National Development and Reform Commission, such as Bohai Industrial Fund in Tianjin; Third, all kinds of investment institutions that appear in the name of investment companies and operate in the same way as private equity funds, but such private equity funds are in a state of lack of regulatory laws.
Individual investors generally participate in equity investment by purchasing private equity trusts, while the second and third methods are mainly institutional investors, and it is difficult for ordinary individual investors to participate.