0 1 Advantages of private equity funds Compared with Public Offering of Fund, private equity funds * * * have the following five advantages.
① Low information disclosure requirements
Public Offering of Fund has high requirements for information disclosure, including quarterly, semi-annual and annual reports, investment targets and investment portfolios. It needs to be published once every quarter; Private equity funds have relatively low requirements for information disclosure and strong concealment.
② Stable operation.
Public Offering of Fund needs to prepare a sum of money in case investors redeem it at any time. If you encounter a lot of redemption, you may need to sell stocks to deal with it, and there is pressure for fund redemption; On the other hand, private equity funds generally operate in a closed mode. During the operation, investors can't withdraw their funds at will, and there is no pressure to redeem their funds, so the operation will be relatively stable.
③ Interest correlation
Public Offering of Fund mainly collects management fees. No matter whether you earn money or not, you can get a large management fee, which is the so-called drought and flood protection. The management fee of private equity funds is closely related to profitability. The higher the yield, the more money you can get. If you lose money, there is not much management fee to take. Even some private equity funds with a net value of 1 don't charge management fees.
Because the income of fund managers is closely related to the profitability of funds, they can be more conscientious when making investments. The cooperation between investors and managers is based on trust and contract, so moral hazard rarely occurs.
④ The operation is more flexible.
Public Offering of Fund will be subject to many restrictions in the operation process, and it is likely to lose good investment opportunities in the equity market where opportunities are fleeting because of complicated procedures; The organization of private equity funds is relatively simple, the freedom of investment decision-making is relatively high, the operation is more flexible, and investment opportunities can be better grasped.
⑤ Tailored.
Public Offering of Fund raises funds for the public and does not set special investment targets for one person or a few people. Private equity funds have clear investment objectives and strong pertinence, which can meet the special investment requirements of customers and even tailor a product for customers.
Summary: Simply put, private equity funds can get higher return on investment through the above advantages, which is also liked by some rich people.
The disadvantages of private equity funds should be viewed from many aspects. There are advantages and disadvantages. The disadvantages of private equity funds mainly include three aspects.
① The investment threshold is high.
Because it is a non-public offering, the entry threshold for private equity funds is relatively high, and there will be certain requirements for the amount of funds, at least 654.38+00,000, as well as certain requirements for investment experience, which generally requires more than two years of investment experience, that is, the so-called "qualified investors".
② The risk is high.
In terms of advantages, we mentioned that the income will be higher, and the risk and income are closely related. The risk of private equity funds will be relatively higher. For example, if you invest in the secondary market, you may use leverage to amplify the income, which also increases the risk.
③ Poor liquidity.
Many private equity funds are closed-ended, and their liquidity is naturally poor. In addition, they may invest in some non-public stocks, which are relatively illiquid and may take a long time to see the benefits.
Summary: The disadvantages of private equity funds are mainly reflected in three aspects: investment threshold, risk and liquidity.
Tips: The fund is risky, so the investment should be cautious.