Private funds raised from specific groups.

What is a private equity fog fund?

Private equity funds are funds raised privately or directly from specific groups. On the other hand, public offering funds raise funds from the public.

In China's financial market, the term "private fund" or "underground fund" usually refers to a kind of collective investment, which is privately raised from specific investors, as opposed to a securities investment fund that is supervised by the competent department of China government and publicly issues beneficiary certificates to unspecified investors.

sources of fund

Private placement is strictly restricted in China, because it can easily become "illegal fund-raising". The difference between the two is: whether to raise funds for the general public, whether the ownership of funds has been transferred, and if more than 50 people raise funds and transfer them to personal accounts, it is illegal to raise funds.

Private real estate investment funds (few now, such as Jincheng Capital), private equity investment funds (such as CDH Hongyi and Goldman Sachs) and private venture capital funds (such as Lenovo Investment, Softbank and IDG).

Main differences between private fog and public fog

(1) proposed different objects. The target of public offering funds is the general public. Private equity funds target a few specific investors.

(2) Different financing methods. The funds raised by public offering are carried out through public offering, while the funds raised by private offering are raised through non-public offering.

(3) Information disclosure requirements are different. Public offering has strict requirements for information disclosure. Private equity funds have low requirements for information disclosure and strong confidentiality.

(4) Different investment restrictions. Public Offering of Fund has strict restrictions on investment types, investment proportion and matching between investment and fund types, while the investment restrictions of private equity funds are completely stipulated in the agreement.

(5) Different performance rewards. 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.