The characteristics of private placement:
1, qualified investor
According to the Administrative Measures of Trust Company's Collective Fund Trust Plan, if a private equity fund is to be established, it must be affiliated with an institution, and individuals cannot apply. Moreover, private equity funds are not affordable for everyone, and the worst is several million. The annual income in the last three years has exceeded 300,000.
2. A high percentage of individuals
Simply put, if you want to set up a private equity fund, you must first become the largest creditor of this fund, so as to attract others to join in.
3. High threshold
First of all, the investment of 1 10,000 wiped out a large part of people with insufficient financial strength, limited the number of participants and ensured the nature of private placement. Secondly, it is guaranteed that those who can enter the private placement are all high-net-worth people, and the corresponding risk tolerance is higher, thus isolating ordinary investors with weak risk tolerance.
4. Lock-in period
Where ordinary investors subscribe for private equity funds, the lock-up period agreed by both parties is generally 1 year. You can't withdraw cash at will within this year. If investors want to withdraw funds, they need to follow the contract signed by both parties. This agreement is to ensure the stability and liquidity of platform funds, which can effectively restrain their short-sighted behavior once they encounter "fickle" investors.
5. Regular redemption
Sponsors should not only consider the lock-up period, what should they do after the lock-up period? Private equity funds have set up a regular redemption clause, that is, after the lock-up period, investors are in a bad mood and suddenly want to withdraw their funds, so they cannot withdraw their funds. They must redeem it within the fixed date of each month stipulated in the contract.
6. Expected annualized distribution of expected income right
Under normal circumstances, sponsors and investors will sign the "Priority Expected Annualized Expected Return Clause". When the expected annualized expected return of investment exceeds a certain threshold, the fund manager can obtain a certain proportion of the expected annualized expected return from the excess investment income according to the agreed carried interest terms.
What if the fund loses money?
For those loss-making funds, gay friends had better check the performance and fund manager changes in recent years.
For those funds with poor performance rankings, redemption can be considered.
The fund manager changes, or the core person of the investment research team of the fund company leaves the company. In these cases, you can also consider redeeming the funds in your hands;
In addition, many gay friends have a misunderstanding: "They are more willing to redeem funds with greater returns and temporarily hold funds with greater losses".
This is actually consistent with the "selling effect" of investors in stock trading, because when people are in a state of loss, they will be extremely reluctant and would rather take greater risks to gamble. In fact, those funds/stocks that make money for you may be good funds/stocks and worth holding for a long time; And those funds/stocks that are losing money, maybe you should "avoid them" as soon as possible.