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Semi-annual liquidation rules for private equity funds
First of all, it needs to be clear whether each fund has a liquidation crisis. Whether it is liquidated or not depends on whether there are liquidation clauses in the contract signed at that time. Therefore, on the issue of how to prevent liquidation, the situation is different, so the coping strategies are different, but they can be mainly divided into the following categories:

Strategy 1: In the face of private equity products near the liquidation line, private equity sources said that the only way at this time is to reduce positions and then slightly increase positions until there are certain opportunities in the market, otherwise they can only be cautious and slowly accumulate safety mats.

Strategy 2: In the face of private equity products that have fallen below the liquidation line. After the liquidation stop loss line is set and triggered in the private equity product contract, there are usually three ways to deal with it. First, directly enter the liquidation procedure to end the product; The second is to communicate with the holder to cancel or reduce the liquidation clause in order to preserve the product; Third, private equity firms use their own funds to fill their net losses. At present, most private placements will choose the second approach for product continuity.

Strategy 3: Facing private equity products without liquidation clauses. In the face of such private placement products, on the one hand, private placement bosses focus on appeasing customers, that is, they generally communicate with customers in depth by holding investor strategy meetings, so that customers can understand the future operation ideas. On the one hand, they mainly operate, and most of them take the initiative to observe the market trend. If they are optimistic about the long-term trend of the market, even when the market plummets, they will not reduce their positions a lot, but wait for opportunities. Once the market falls out of opportunities, they will buy in large quantities.

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