what's the situation?

Why should I be "discriminated" when buying a fund?

It's really not like that.

Regulatory authorities require that private equity funds must be raised from qualified investors and must not be publicly promoted. They are mainly sold to specific investors through private consultation.

It can be simply understood as: "tailor-made" for wealthy people.

The fundraising method is completely different from that of public funds, which requires qualified investors in private funds to have higher risk identification and bearing capabilities.

The more mature an investor is, the stronger his risk identification and tolerance will be, and he will not stop thinking about food and drink just because of an unexpected loss of 5,000 or 6,000.

Why 1 million?

For qualified investors, my country's "Interim Measures for the Supervision and Administration of Private Equity Investment Funds" stipulates that the financial investment in a single private equity fund shall not be less than 1 million. In fact, the investment of private equity funds is not an investment model produced in my country. .

All aspects of the development of private equity in our country are based on relatively mature foreign standards. For example, when measuring the conditions for qualified investors in private equity investment, we refer to American standards.

In December 2015, the SEC released the "Report on Review of the Definition of Qualified Investors", which set out a standard definition of qualified investors.

The identification of individual qualified investors is marked as follows: the financial assets of the individual or that of his or her spouse exceed US$1 million; or the invested assets exceed US$1 million, excluding the real estate used by the individual to live.

In the past two years, the annual average of the individual should not be less than 200,000 U.S. dollars, or the combined annual average of the individual and his spouse should not be less than 300,000 U.S. dollars. At the same time, there must be sufficient reasons to prove that the same income expectations can be maintained at the present time.

In addition to meeting the threshold of 1 million yuan in our country, for individual investors: personal financial assets are not less than 3 million yuan, or the average annual personal income in the past three years is not less than 500,000 yuan.

Viewed this way, the logic of private equity management in both countries is the same.

Taking into account various factors such as the national economy and differences in personal income levels, the identification of "qualified" and "having sufficient risk identification and resistance capabilities" is mainly a numerical difference.

And this 1 million is the re-certification of the above standards.

After all, individual investors who can meet the standards are quite comfortable spending so much money.

It’s not discrimination, but protection. Most private equity investment projects have a long payback period, which requires ensuring the relative stability of funds.

Assuming there is no investment threshold or the threshold is too low, excess returns will attract a variety of investors.

Their risk tolerance is different, and they may withdraw funds in a panic due to temporary fluctuations. This results in unstable funding sources and is not conducive to managers' decision-making.

Voices from Weibo Public Offering Xiaosan On the other hand, investors will also miss opportunities and suffer huge losses due to frequent buying and selling.

Another point is, if there are too many participants, wouldn’t the private placement become a public offering?

Therefore, having this 1 million not only proves the financial strength of qualified investors, but also protects ordinary investors with weak risk tolerance.

With inflation and currency depreciation, the investment threshold for private equity funds is likely to further increase in the future.