Private placement fund, called private placement abroad, is a financial concept corresponding to fund public offering. 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.
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