What does private parent fund mean? Private placement fund, also known as fund in fund, or FOF for short, is actually a kind of fund that invests in other funds. By pooling a large amount of capital, private equity parent funds can establish cooperative relations with many excellent investment institutions, become their "Limited Partners (LP)" and share the investment results.

Private parent fund is the origin.

The private equity parent fund model originated from the American Master-feederfund structure model. Also known as "target fund plus linked fund", the purpose is to pool the funds of domestic taxable investors, tax-free investors and overseas investors in one fund to improve operational efficiency and save costs.

The earliest private placement products in the form of parent fund and sub-fund in China can be traced back to similar indexed fixed income products under Bohong Shujun. From 20 10 to 1 1 to 20 12, Bohong Shujun invested * * * to raise 33 sub-funds and continuously invested the raised funds in the main fund. Under this product structure, the main fund is equivalent to a pool of water, and the sub-fund is equivalent to a bucket of water. The inflow and outflow of water in the pool are all completed through "barrels"

Advantages of private parent fund

1, lowering the threshold for cooperation. The parent fund has greatly lowered the threshold of sharing rent with institutional investors, and the general threshold has been reduced to about 654.38+0 million.

2. Reduce investment risks. Private equity parent funds can cooperate with multiple institutional investors at the same time to minimize risks.

3. Less affected by market fluctuations. The investment cycle of private equity parent funds is often a closed period of several years. In this process, the parent fund manager will strengthen his investment strategy. This persistence will often help investors avoid the market trough, quit at the peak and enjoy the dividends brought by time and compound interest.