The English name of Hedge Fund is Hedge Fund, which means "risky hedge fund". Originated in the United States in the early 1950s. The purpose of its operation is to use financial derivatives such as futures and options, as well as the operating skills of buying and selling different related stocks and hedging risks, which can avoid and resolve the risks of securities investment to a certain extent. In the most basic hedging operation. After the fund manager bought a stock, he also bought a put option with a certain price and time limit. The utility of put option is that when the stock price falls below the option-limited price, the holder of seller option can sell his stock at the option-limited price, thus hedging the risk of stock decline. In another hedging operation, the fund manager first chooses a certain kind of bullish industry, buys a few good stocks in this industry and sells a few bad stocks in this industry according to a certain proportion. The result of this combination is that if the industry is expected to perform well, the increase of high-quality stocks will exceed other stocks in the same industry, and the income from buying high-quality stocks will be greater than the loss caused by shorting inferior stocks; If the expectation is wrong, the stocks of this industry will fall instead of rising, then the stocks of poor companies will fall more than the high-quality stocks. Then the profit of short selling will be higher than the loss caused by the decline in buying high-quality stocks. Because of this mode of operation, the early hedge fund can be said to be a form of fund management based on the conservative investment strategy of hedging. 1. Private placement fund, called private placement abroad, is a financial concept corresponding to Public Offering of Fund. It is a collective investment that publicly raises funds from specific investors in private, 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. Due to the lack of systematic legal norms, there are often huge potential risks in the operation of contractual private equity funds in China, and even become tools for some lawless elements to seek illegal interests. In practice, there are two kinds of illegal private equity funds: illegal fund-raising and illegal or disguised absorption of public deposits. According to the provisions of China's criminal law, illegal fund-raising refers to the behavior of legal persons, other organizations or individuals to raise funds from the public without the approval of the competent authorities. The object of illegal fund-raising is the public, and most of the means are fraud, deceiving the public and inducing their investment by promising high returns and high interest rates. Fraud is the most important reason prohibited by law. Generally speaking, the target of private equity funds is a few specific investors, and the threshold of these investors is generally high. The amount of funds involved should be of a certain scale, such as 6.5438+0 million yuan. Its purpose is * * * to invest together, and * * * to enjoy the benefits, including risks. However, if the promoters of private equity funds promise investors a high proportion of guaranteed income, they can be identified as illegal fund-raising. According to the laws of our country, no unit or individual may engage in the business of absorbing public deposits or absorbing public deposits in disguised form without the approval of the competent financial department, otherwise it will constitute an illegal act. The fundamental difference between illegal or disguised absorption of public deposits and private equity funds lies in whether to pay interest. The income of private equity funds comes from risk income and should not involve any form of fixed interest, otherwise it will be illegal. To sum up, if the establishment of private equity funds conforms to the provisions of China's trust law, its legitimacy should be beyond doubt, but in its specific operation process, it must not violate the relevant provisions of existing laws. 2. The English name of Hedge Fund is Hedge Fund, which means "hedge fund" and originated in the United States in the early 1950s. The purpose of its operation is to use financial derivatives such as futures and options, as well as the operational skills of buying and selling different related stocks and hedging risks, which can avoid and resolve investment risks to a certain extent. In the most basic hedging operation, the fund manager buys a put option with a certain price and term after buying a stock. The utility of put option is that when the stock price falls below the option-limited price, the holder of seller option can sell his stock at the option-limited price, thus hedging the risk of stock decline. In another hedging operation, the fund manager first chooses a bullish industry, buys several high-quality stocks in this industry, and sells several inferior stocks in this industry according to a certain proportion. The result of this combination is that if the industry is expected to perform well, the increase of high-quality stocks will exceed other stocks in the same industry, and the gain from buying high-quality stocks will be greater than the loss from shorting inferior stocks; If the expectation is wrong, the stocks of this industry will fall instead of rising, then the decline of the stocks of poor companies will be greater than that of high-quality stocks, and the profit of short selling will be higher than the loss caused by the decline of buying high-quality stocks. Because of this mode of operation, the early hedge fund can be said to be a form of fund management based on the conservative investment strategy of hedging. After decades of evolution, hedge funds have lost the original connotation of risk hedging, and hedge funds have become synonymous with a new investment model. That is, based on the latest investment theory and complex financial market operation skills, we should make full use of the leverage of various financial derivatives to undertake high-risk and high-yield investment models.