What does graded private equity fund mean? Do you need to know the specific types of private equity funds before investing in private equity funds? The following is how to classify the private equity funds brought by Bian Xiao, hoping to help you to some extent.
How to classify private equity funds?
Private equity funds can be classified in many ways. The following are common classification methods of private equity funds and some types of examples:
According to the classification of investment strategies:
Equity investment fund: focus on investing in equity, such as stocks and company shares.
Debt investment fund: mainly invests in fixed-income investments such as bonds and credit assets.
Multi-strategy fund: adopt a variety of investment strategies, such as equity investment, debt investment, relative value strategy, etc.
Venture capital fund: mainly invests in start-ups or enterprises with high growth potential.
Infrastructure Fund: Focus on investing in infrastructure projects, such as roads, bridges and electricity.
Real estate fund: investing in real estate-related projects, such as commercial real estate and residential real estate.
Classification by fund operation mode:
Special investment plan (SPV) fund: set up a special company or entity as an investment platform for specific investment projects.
Joint fund: A number of fund management companies or institutions jointly raise funds and jointly manage investments.
CollectiveInvestmentTrust (CIT) Fund: Trust companies provide services to raise investment funds for investors.
According to audience classification:
High-net-worth individual (HNWIs) fund: for individual high-net-worth investors.
Institutional investor fund: For large institutional investors, such as insurance companies and pension funds.
According to the classification of feeding objects:
General Partnership Fund: The funds raised are for qualified investors, such as institutional investors and high-net-worth individuals.
Trust fund: raising funds for the beneficiaries of the trust plan through the trust company.
It should be noted that the classification of private equity funds is not fixed and may be different due to different regions and regulatory requirements. In addition, the same private equity fund may have multiple classification attributes. Investors should make a comprehensive evaluation and selection according to their own needs, risk preferences and investment objectives when choosing private equity funds.
To distinguish private equity funds, we can consider the following main characteristics:
Objective: Private equity funds usually only raise funds from certain qualified investors, such as high-net-worth individuals or institutional investors. On the other hand, publicly issued funds are open to investors and can be purchased by any individual or institution.
Liquidity: The liquidity of private equity funds is lower than that of Public Offering of Fund. Private equity funds usually have lock-up period or other redemption restrictions. Investors can't redeem their funds at any time within a certain period of time, so they need a long-term investment philosophy.
Investment strategy: Private equity funds have greater investment flexibility. Fund managers can adopt more diversified and personalized investment strategies, such as equity investment, venture investment and debt investment, in order to pursue higher returns.
Investment threshold: Private equity funds usually have a high investment threshold, requiring investors to have a certain level of net assets or income. In contrast, Public Offering of Fund has a lower investment threshold and is more suitable for ordinary investors to participate.
Information disclosure and confidentiality: Compared with Public Offering of Fund, private equity funds require less information to be disclosed. The investor information and portfolio of private equity funds are generally confidential and will not be publicly disclosed, which can provide higher privacy and confidentiality.
Regulatory requirements: Private equity funds are subject to relatively loose regulation in some countries or regions, which is more flexible than the regulatory requirements in Public Offering of Fund. This may allow private equity funds to choose investment targets and operational strategies more freely, but it may also increase investors' risks.
What do you mean by public offering and private offering?
Public Offering of Fund: an investment product with low threshold, strong liquidity and scattered risks.
Public Offering of Fund is an investment product issued by a professional fund management company or fund custodian, which collects funds from the public, concentrates on investing in different financial markets, obtains income and distributes it to investors. Compared with other financial products, Public Offering of Fund has many advantages, such as low investment threshold, strong liquidity, scattered risks and professional management, and has become the choice of many investors.
A publicly issued fund is sold to investors in the form of fund shares. When investors buy fund shares, they become fund holders and enjoy the investment income and investment risks generated by the fund. Managers in Public Offering of Fund are responsible for making investment decisions and operating the fund's portfolio, so as to maximize returns and control investment risks.
What stocks do private equity funds hold?
When choosing the stocks to invest in, private equity funds will choose different stocks according to their own investment strategies and investment objectives. The following are some types of stocks that private equity funds may hold:
Growth stocks: Private equity funds may invest in growth stocks with good growth potential. These companies are usually in the leading position in the industry, with innovative products or services, and are expected to achieve rapid growth.
Value stocks: Private equity funds may choose value stocks with lower valuations. These stocks are usually traded at relatively low P/E ratio, P/B ratio and other indicators, and are considered undervalued.
Large-cap stocks: Private equity funds may invest in some large-cap stocks with large market value and wide influence. These companies occupy an important position in the industry with relatively stable profitability and strong market position.
Emerging industry stocks: Private equity funds may pay attention to some leading enterprises in emerging industries, such as companies in the fields of science and technology, clean energy and artificial intelligence. These companies are generally considered to have high growth potential.
How do individuals set up private equity funds
Compliance with regulatory requirements: individuals should ensure compliance with the requirements of relevant local regulatory agencies, including qualifications, financial strength and professional knowledge.
Set up a management company: individuals need to set up a private equity fund management company to operate private equity funds. This requires registration and compliance with relevant laws and regulations, including company registration, organizational structure and risk control.
Registration and filing: Private equity fund management companies need to register and file in accordance with regional laws and regulations, and submit relevant materials, such as fund contracts, prospectus, fundraising plans, investment decision-making processes, etc.
Fund raising: Private equity fund management companies can start raising funds to attract investors to participate in the fund according to the set investment strategy and risk preference.
Investment operation: once the funds are raised, the fund management company can start investment operation according to the investment strategy, select investment targets and manage the investment portfolio of the fund.