Private placement fund refers to an investment fund set up by raising funds from qualified investors in China in a non-public way, including contractual funds or companies or partnerships whose assets are managed by fund managers or general partners for investment activities. The following is a small collection of how to manage private equity funds, welcome to read.

How to manage private equity funds

1. Every legal private placement institution must be managed by a qualified commercial bank.

2. The custodian bank shall supervise and close the raised funds, make direct external payment according to the custody agreement and the allocation instruction of the fund investment decision-making committee, and distribute the profits and income of the fund investment according to the investor's fund investment.

3. The custodian bank is responsible for managing the whereabouts of funds. There is no need to manage the company and there is no right to manage the funds. The management company is only responsible for raising funds and investing. Therefore, investors' money is kept by the bank entrusted by the fund, and there will be no misappropriation or embezzlement of funds. Because in China, there is almost no risk in putting money in the bank except for irresistible factors.

The meaning of private equity fund

Private equity fund is called the financial concept corresponding to Public Offering of Fund in foreign countries. It is a kind of collective investment that is raised privately and publicly from specific investors, and is often called "underground fund" in China's financial market.

There are two kinds of private equity funds commonly used in the financial market, one is contractual private equity funds based on signing entrusted investment contracts, and the other is corporate private equity funds based on investing in joint-stock companies. At present, the more popular private equity funds in China are generally contractual private equity funds.

From the legal nature, contractual private equity fund is essentially a trust legal relationship, and its parties include promoters (fund managers), investors (fund share purchasers) and beneficiaries (generally investors or fund share holders). Investors entrust trust funds to fund managers through contracts (trust contracts); Fund managers use fund funds for securities investment or industrial investment in their own names. Investment gains are shared by share holders, and investment losses are also shared by fund share holders. At the same time, the fund manager receives remuneration as agreed. Before the introduction of relevant laws and regulations to adjust private equity funds in China, we can supervise such private equity funds with reference to the relevant provisions of the Trust Law.

How much risk does the private equity market have?

Market risk: The private equity market is affected by macroeconomic fluctuations, market sentiment changes and other factors, and the price fluctuates greatly, so investors may face market risk and price risk.

Non-liquidity risk: the liquidity of private equity market is relatively poor, and it may be difficult for investors to quickly realize or withdraw from investment, resulting in financial difficulties.

Information asymmetry risk: There is relatively little information disclosure in the private equity market, and investors may not get enough information and face the risk of information asymmetry.

Corporate performance risk: Private equity represents the equity of a specific company. If the performance of the invested company is lower than expected, or even there are operational difficulties and bankruptcies, investors may face losses.

Legal and regulatory risks: the private equity market is restricted by regulatory provisions, and non-compliant operations may face legal risks and penalties.

How should private placement operate?

Research due diligence: Before choosing private equity, conduct sufficient research and due diligence to understand key information such as company performance, management team and financial status, and evaluate its investment potential and risks.

Regular risk assessment: regularly assess the risk exposure of the portfolio to ensure that the investment risk matches its own risk tolerance.

Diversification: Spread investment funds among different private equity stocks to reduce the risk of single investment.

Regular monitoring and adjustment: regularly monitor the performance of the portfolio and adjust the position in time according to the market situation and personal investment objectives.

How do private equity funds manipulate stocks?

Private equity funds should not manipulate the stock market, because manipulating the stock market is illegal and will have an improper impact on the market. Private equity funds should invest in a legal, honest and transparent way, and abide by relevant laws, regulations and ethics.

The operating skills of private equity funds are usually related to investment strategy, risk control and research ability.