Private placement fund is a kind of fund that collects funds from specific investors in a non-public way and invests in specific objects. Many investors don't know much about private equity funds and how they make money. So how do private equity funds make money?

How do private equity funds make money?

The income of private equity funds is based on the model of "fixed investment management+performance commission", and the interests between fund teams and investors are tied together. Public Offering of Fund's main income is management fees, and the managers of private equity funds collect management fees and get a share of income. The ratio is usually 2%+20%, that is, 2% management fee plus 20% revenue share. However, private equity funds generally rely on performance commissions as their income.

Of course, this performance commission can only be extracted if the fund performance exceeds the last record of the fund history. For example, the best score in the history of the fund is 1. 1 yuan, so on the next performance extraction day, if the private equity fund manager does not improve his performance and his net value still falls back to 1 yuan/share, then he will not get the performance commission.

The investment threshold of private equity funds is higher than that of Public Offering of Fund, and the initial investment amount is generally 654.38+00,000. In addition, investors' assets must reach the specified amount, and the risk of private equity funds will be higher than that of Public Offering of Fund. In addition, private equity funds will have a certain closed period, and generally cannot be redeemed at any time, so the flexibility is poor.