A public offering is a public offering. Publicity has two meanings: the first is that you can advertise and raise money from all the people you know and don't know. The second is that the number of proposed objects is relatively large, for example, it is generally defined as more than 200 people.
The difference between them. Public Offering of Fund is purchased from a fund company or an agent bank or a securities company.
Private equity fund is that several people give money to someone to do it. One is at least 50W, and the other is too risky. It is recommended not to buy it.
Compared with Public Offering of Fund, the biggest difference is that private equity funds are not protected by fund law, but only by civil law, contract law and other general economic and civil laws. In other words, the CSRC will not protect private equity investors. You can solve the problem yourself, or go to court or settle it.
Now it is better for the people for fund holders to buy and publicly issue funds ... publicly issue funds.
Their specific differences are as follows:
First of all, legally
There are relatively sound laws for public offering-securities investment fund law and various management measures of CSRC, but there is no corresponding legal norm for private offering at present. At present, it relies on the partnership enterprise law (the preparation of limited partnership private placement has not yet been implemented), the trust law (trust provides a legal way for private placement and is a unique form of private placement in China) and the contract law (it is a contractual private placement)
Unfortunately, when the Securities Investment Fund Law was enacted, there was no adjustment to private equity funds. For private equity funds, although their investment is flexible and should not be over-regulated, the most basic entry qualifications should be available. In order to prevent moral hazard, fund companies should have minimum capital restrictions when they are established, and draw risk reserves. In addition, the threshold for investors should also be limited. China has always regarded stability as the overall situation. If investors are not rational enough to invest most of their wealth in risky fund varieties, the instability caused can be imagined. We can refer to foreign legislation and existing laws on fund trust, set a minimum threshold, limit the investment ratio of family assets, and effectively educate investors.
Second, from the perspective of supervision.
Public offering is supervised by China Securities Regulatory Commission. The CSRC conducts regular and irregular inspections on fund companies, including document inspection and on-site inspection. The scope of inspection by the CSRC includes fund companies, senior managers of fund companies and all aspects of the fund from establishment, sales to investment. However, private placement is not regulated at present. For the CSRC, private equity fund companies are only regulated by ordinary institutional investors or even natural person investors. As long as they want to escape this kind of supervision, there is a way. The flexibility of private placement is the biggest advantage, but proper supervision is necessary. Any flexibility, if it causes market chaos and stock price manipulation, is illegal.
In addition to government supervision, Public Offering of Fund also practices industry self-regulation. The Securities Industry Association has rules and regulations on the management of its members, and provides training as needed to improve the management and investment level and enhance legal understanding. In short, public offerings have their own institutions, while private placements do not.
Public offering requires mandatory information disclosure, while private placement is an agreement between fund companies and investors. The disclosure content, disclosure period and disclosure items are all agreed by the agreement, and there is no mandatory disclosure obligation for private placement.
Public offering needs fund custody and must be entrusted to a third party (bank), while private placement has no fund custody except trust, which also leads to greater risk of private placement.
Third, it comes from investment restrictions.
Public offering has strict investment restrictions. In terms of investment varieties, investment proportion, matching between investment and fund types, the proportion of all funds under a fund company investing in a listed securities, and even in order to prevent the transfer of benefits, funds under the same fund company may not buy or sell the same securities on the same day.
Private equity funds, in terms of investment varieties, are not limited to domestic securities, but may also involve futures, gold, foreign exchange and foreign securities and futures. This is much more extensive than public offering, and the investment restrictions are completely stipulated by the agreement. Even in the domestic securities operation, there are no strict restrictions required by Public Offering of Fund, so it is difficult to supervise. For example, at present, the most standardized trust method, trust private equity fund, if trust plans are set up in several trust companies, one may plan to sell a stock and the other to buy it. If the amount of funds is large enough, it will lead to stock price manipulation. Contractual private equity funds, because they are not in the account name of the fund company, account for the proportion of investing in a stock, which is difficult to supervise and may also lead to stock price manipulation.
Fourth, from the way of raising funds.
There are no clear legal provisions for public offering and private offering. China has stipulated the concept of public offering of securities in the Securities Law. "In any of the following circumstances, it is a public offering: (1) issuing securities to unspecified objects; (2) More than 200 people have issued securities to specific objects; (3) Other issuance acts stipulated by laws and administrative regulations. "
If private placement is understood as that the cumulative number of investors does not exceed 200 or the fund trust does not raise funds from unspecified objects, then the legal revision of the fund trust is contradictory. In the past, the number of investors in a fund trust plan was limited to 200, but now the number of institutions is no longer limited. Of course, this is to encourage mature investors, and it is an improvement in management. However, the legal inconsistency makes there is no strict boundary between public offering and private offering. One thing that is certain about private placement is that it cannot be publicized through public media such as radio, television and newspapers, otherwise it will constitute a public offering.
Fifth, from the tax.
Public offering has clear national tax standards and relatively standardized management, while private offering is difficult to supervise because of various legal forms and various means of tax avoidance and even tax evasion.
Sixth, the performance reward of the fund.
Public Offering of Fund does not extract performance compensation, but only collects management fees. Even so, I have made a lot of money. Private equity funds are bound to receive performance compensation, most of which do not charge management fees, and some of them are deducted from performance compensation after receiving management fees in advance. For Public Offering of Fund managers, performance is used for ranking, while for private fund managers, performance is a real share and direct income.
Seventh, the income of investors.
Because of the flexible operation of private placement, the income may be higher than that of public offering, especially when the market is not good, the advantages of flexible operation of private placement are more obvious. However, when the market is good, the difference between the two is not too big (there are many 3 prefixes in Public Offering of Fund), especially after private placement has extracted a large number of performance rewards, investors may not be able to obtain higher income than public offering. Even, some private placements charge performance compensation when the income is not as good as that of public offerings, which is unreasonable for investors. Therefore, when signing a contract, investors can agree with the fund company that when the return on investment is less than or equal to the growth rate of the stock index, the fund company will not charge performance compensation, but only charge management fees.
Eighth, the scale and management of fund companies.
The scale of private equity funds has now reached one trillion, which is very spectacular. But when it comes to the scale and standardized management of fund companies, at present, due to the sound laws and regulations, there are a number of fund companies with relatively standardized management, emphasis on risk control and clear investment concepts. The private placement that everyone admires is some star fund managers who have come out of public offerings. This company has not yet formed a strong management company by relying on personal brands, and needs to be improved after private placement.