Private fund managers need to put on record and set up private fund products, and regularly disclose fund information as required. The funds of private equity funds are generally managed by banks or qualified financial institutions, and the funds flow between the custody account, the fundraising account and the individual accounts of investors.
Fees for purchasing private equity funds
The subscription cost of private equity funds involves subscription fee, redemption fee, fixed management fee and floating management fee.
1, subscription fee
Qualified investors are interested in a private equity fund product. After various confirmations with relevant institutions (the private equity process takes a walk), they must pay a one-time fee when subscribing for the products they are interested in during the fundraising period. The specific subscription fee varies according to the fund type. In general, a subscription fee of 1% is required, which is charged in addition to the price. That is, if you buy a private placement of 1 10,000, if the subscription fee is 1%, then you need to remit10/10,000 into your bank account.
2. redemption fee
Private equity funds have a closed period. Generally, the raising period of private equity funds is 1-3 months, and the closing period is 6- 12 months. When the recruitment period is over, it will enter the closed period. According to the information consulted by the author, there are redemption closed period and quasi-redemption closed period. The closed period of redemption is generally 1-6 months, during which redemption is not allowed. The closing period of quasi-redemption is generally 6- 12 months, during which redemption applications are accepted. However, redemption requires a redemption fee, and the general rate is 3%, that is, redemption fee = redemption funds ×3%.
3. Fixed management fee
Choose good private equity products and invest money. This private fund product is managed by a private fund manager, and it is not easy for others to manage it. Therefore, you need some money to pay the fund manager. There is a saying that private equity funds need to pay a fixed management fee of 1.5%-2% every year. Where is this part of the cost used? Tell you, it includes a series of expenses incurred in the daily operation of private equity funds, such as trust management fees, bank custody fees, attorney fees, etc. This fee is accrued on a daily basis. Generally, you have deducted this fee from the net value of the fund.
4. Floating management fee
Before distributing the benefits, it is necessary to extract part of the profits as performance compensation to the fund manager. Usually, private fund managers charge a floating management fee of 20%, which is directly deducted from the trust assets. There are generally three forms of 20% management fee, that is, 20% of the profits extracted by the project, 20% of the total profits of the fund and 20% of the excess profits after deducting the income.