1. Public Offering of Fund and private equity funds have different fundraising goals. The target of public offering funds is the general public, that is, investors who are not specific to society. The target of private equity fund is a few specific investors, including institutions and individuals.
2. Public Offering of Fund and private equity funds have different financing methods. Public Offering of Fund raises funds through public offering, while private equity funds raise funds through non-public offering, which is the main difference between private equity funds and Public Offering of Fund.
3. Public Offering of Fund and private equity funds have different information disclosure requirements. Public Offering of Fund has very strict requirements on information disclosure, such as its investment objectives and portfolio. Private equity funds have low requirements for information disclosure and strong confidentiality.
4. The investment restrictions of Public Offering of Fund and private equity funds are different. Public Offering of Fund has strict restrictions on the types of investment, the proportion of investment and the matching between investment and fund types, while the investment restrictions of private equity funds are completely stipulated in the agreement.
5. Public Offering of Fund and private equity funds have different performance returns. Public Offering of Fund does not extract performance compensation, but only collects management fees. Private equity funds, on the other hand, charge performance compensation and generally do not charge management fees. For Public Offering of Fund, performance is only the honor when ranking, while for private equity funds, performance is the basis of remuneration.
6. Apart from some basic institutional differences, private equity funds and Public Offering of Fund are quite different in investment concept, mechanism and risk taking.
First of all, Public Offering of Fund and private equity funds have different investment objectives. Public Offering of Fund's investment goal is to surpass the performance comparison benchmark and pursue the ranking in the same industry. The goal of private equity fund is to pursue absolute return and excess return. But at the same time, private investors have to take higher risks.
Secondly, their performance incentive mechanisms are different. The income from the fund company's public offering is the daily fund management fee, which has nothing to do with the profit and loss of the fund. The income of private placement is mainly income sharing. Only when the net value of private placement products is positive can management fees be withdrawn. If the fund they manage is losing money, then they will have no income. Generally, the performance reward extracted by private equity funds according to performance profit is 20%.
In addition, Public Offering of Fund has strict procedures and strict policy restrictions on investment, including restrictions on shareholding ratio and investment ratio. When investing in Public Offering of Fund, the operation of public offering is strictly regulated because it involves the interests of investors. In addition to not manipulating the market in violation of the provisions of the Securities Law, the investment behavior of private equity funds is flexible in terms of investment methods, shareholding ratio and positions.
The biggest difference between private placement and public offering is the incentive mechanism, profit model, supervision and scale. The specific investment methods, especially the stock selection criteria, are not different under the same style.
As far as Public Offering of Fund is concerned, its investment style was determined at the beginning of its establishment. For example, some specialize in small-cap stocks, some focus on large-cap blue chips, some follow growth investment strategies, and some tap value-based opportunities with rich varieties, which can provide corresponding products for investors with different risk tolerance.
Comparison between Public Offering of Fund and Private Equity Funds
For private equity funds, most of them are small in scale, and there are few domestic private equity funds with 654.38 billion yuan. They pursue the absolute return on investment, not the scale to earn management fees.
Due to the limited scale of private management funds, it is unlikely to follow the index (holding a large number of blue chips) like public offerings, and the investment style is more flexible. That is to say, after doing a good job in risk management, it mainly focuses on mining individual stocks (big bull stocks) and is more sensitive to some hot spots in the market. Those successful managers in Public Offering of Fund in the past have a strong ability to tap bull stocks, and they can give full play to their specialties after private placement. They don't have to be forced to hold a large number of index heavyweights with average performance as before, they can let go of their hands and feet to choose stocks, and they can even be varieties that Public Offering of Fund regarded as high-risk in the past, such as ST and poor-performing stocks, but only if their salted fish may turn over in the future after research, not just the traditional "farmers" or "traders"
If you manage a 9-digit private equity fund, you will naturally focus on pure stock selection and pursue absolute returns, and the efficiency of fund use will be much higher than that of public offering. After all, with fewer plates, we can choose to invest in more stocks. As long as its growth can be determined and its price is reasonable, it can enter even if it has a circulating market value of 500 million, which most Public Offering of Fund can't do, but small-cap stocks are often more likely to have 10 times the stock.
The life of private placement will be more moist, and the return will be attractive from the perspective of individuals and teams. But if you are ambitious and want to do it on a large scale, you will eventually turn to public offering and earn a fixed management fee, because the bigger the scale, the more difficult it is to surpass the market performance.
If private equity funds are compared to Public Offering of Fund, Public Offering of Fund's rationality is basically possessed by private equity funds, while Public Offering of Fund's shortcomings are often overcome by private equity funds. Public Offering of Fund is characterized by decentralization, information transparency and risk sharing, but these advantages are actually discounted. It is very expensive for fund holders to attend fund meetings, and fund sponsors actually control fund meetings and the appointment of fund managers, which makes the separation of four powers in fund public offering actually only three powers. Public Offering of Fund's information disclosure is to publish the investment portfolio every half month, but the information is lagging behind, and investors of private equity funds can know the fund operation anytime and anywhere. For the risk, the promoters in Public Offering of Fund actually share very little, while for private equity funds, the risk under the guarantee contract is entirely borne by the manager, who also shares the risk under the split contract and the guarantee-plus-share contract with investors.
Public Offering of Fund has strict regulations on the qualifications of fund management companies and the custodians of fund assets. The fund custodian is actually a bank in China, because its registered capital must reach 8 billion yuan. Closed Public Offering of Fund also publishes its net asset value once a week and its portfolio once a quarter. Because the public offering of funds is in broad daylight, it is also strictly supervised by the regulatory authorities. Therefore, on the whole, Public Offering of Fund's assets are safer and more acceptable.
In terms of scale, private equity funds are relatively small, while Public Offering of Fund is relatively large. Public Offering of Fund is transparent, and its performance will be published weekly and monthly. Private equity funds are not publicly audited and disclosed, and it is difficult for ordinary people to know. Just like depositing in a bank, the interest given by the bank is good, and the subscription funds are extremely increased, so it is easy to make the public offering bigger. And private placement, even if he says that he is doing well, is hard to believe, and his threshold is high, so Public Offering of Fund is a malicious role, and private placement funds are hard to do. You should affirm that Public Offering of Fund is fast on a large scale, but the physical strength of private equity funds is not good.
Every coin has its two sides. The big one runs as slow as an elephant, and the small one runs fast. Then the pressure on Public Offering of Fund is not so frequent, not as frequent as the share price. Then private equity funds have no pressure to rank short-term performance, so don't feel this pressure is great. As the manager of private equity fund, he didn't achieve much, but as Public Offering of Fund, he can do it for a long time. Private equity funds are short-term because of the greater pressure. You have to do better than public offering before people will turn to your private offering.
The disadvantage of private equity fund is Public Offering of Fund's advantage, and the advantage of private equity fund is Public Offering of Fund's disadvantage. Private equity fund is the product of market mechanism, so its operating mechanism is very flexible. Everything is for investors to make money, otherwise they can't survive.
Because the public offering of funds is in broad daylight, it is strictly supervised by the regulatory authorities. Although the scale of private equity fund is smaller than that of Public Offering of Fund, its income is higher. In fact, the shortcomings of private equity funds are the advantages of Public Offering of Fund, and the advantages of private equity funds are also the shortcomings of Public Offering of Fund.