Public Offering of Fund and private equity funds are two diametrically opposed funds. The following are their specific differences:

1. The fundraising targets are different: private equity funds are privately raised or directly raised from specific groups, while Public Offering of Fund is directly raised from the public.

2. There are different ways to raise funds: private equity funds are sold privately, while Public Offering of Fund is sold publicly.

3. Different information disclosure: private equity funds have less information disclosure and strong confidentiality; The public offering of funds is strictly regulated, which requires comprehensive information disclosure.

4. Different investment restrictions: the investment restrictions of private equity funds are stipulated in the agreement. Public Offering of Fund has strict investment scope restrictions according to different types of funds. For example, money funds are not allowed to invest in stocks.

5. Different performance rewards: private equity funds charge performance rewards, and generally do not charge management fees; Public Offering of Fund does not extract performance compensation, but only collects management fees.

6. Different investment ideas: Private equity funds pursue absolute returns and excess returns, while Public Offering of Fund's investment goal is to exceed the performance comparison benchmark.

7. Different investment ratios: Private equity funds are flexible in terms of investment methods, shareholding ratio and positions, and Public Offering of Fund has strict requirements on the ratio of self-investment because it involves the interests of many investors.

Characteristics of private equity funds

The operation mode of private equity fund is equity investment, that is, the shares of unlisted companies are obtained through capital increase and share expansion or share transfer, and profits are made through share value-added transfer. The characteristics of equity investment include:

1. The return on equity investment is very rich. Unlike creditor's rights investment, which earns a certain percentage of interest income from invested capital, equity investment obtains dividends from the company's income according to the proportion of capital contribution. Once the invested company is successfully listed, the profit of private equity investment fund may be several times or dozens of times.

2. Equity investment is accompanied by high risks. Equity investment usually needs to go through several years of investment cycle, and because it is invested in developing or growing enterprises, the development risk of the invested enterprises themselves is very high. If the invested enterprise ends in bankruptcy, the private equity fund may lose all its money.

3. Equity investment can provide all-round value-added services. Private equity investment not only injects capital into the target enterprise, but also injects advanced management experience and various value-added services, which is also a key factor to attract enterprises. While meeting the financing needs of enterprises, private equity investment funds can help enterprises improve their management ability, expand procurement or sales channels, integrate the relationship between enterprises and local governments, and coordinate the relationship between enterprises and other enterprises in the industry. All-round value-added services are the highlight and competitiveness of private equity investment funds.

legal ground

Interim Measures for the Supervision and Administration of Private Investment Funds

Article 16 Where a private fund manager sells private funds on his own, he shall evaluate the risk identification ability and risk-taking ability of investors by means of questionnaire survey, and the investors shall make a written commitment to meet the requirements of qualified investors; A risk disclosure statement shall be made and signed by the investor for confirmation.

Where a private fund manager entrusts a sales organization to sell private funds, the private fund sales organization shall take measures such as evaluation and confirmation as prescribed in the preceding paragraph.

The content and format guidelines of investor risk identification ability and tolerance questionnaire and risk disclosure book are formulated by fund industry associations according to the characteristics of different types of private equity funds.

Article 17 When a private fund manager sells a private fund by himself or entrusts a sales organization to sell a private fund, he shall conduct a risk rating on the private fund by himself or entrusts a third-party organization, and recommend the private fund to investors with matching risk identification ability and risk-taking ability.