What is a private equity fund?
The so-called private equity fund, which can also be called a fund raised from a specific target, refers to a fund set up in a private way to raise funds for a few institutional investors or individuals. Its sale and redemption are carried out by the fund manager through private consultation with investors.
Compared with Public Offering of Fund, the ways of raising private equity funds are different. In Public Offering of Fund, public offering is adopted, while private equity funds raise funds by private placement, which is the main difference between Public Offering of Fund and private equity funds. In the United States, Public Offering of Fund, such as children's funds and pension funds, generally advertise in public media to attract customers, while the securities law of hedge funds stipulates that they should not use any media to advertise when attracting customers, and their participants mainly obtain it from the so-called citizens in the upper class or the managers who directly know a hedge fund in the form of so-called "reliable investment news"; Secondly, the fund-raising targets are different. Public Offering of Fund faces an uncertain public, while private equity funds are raised by a few specific investors. Third, the information disclosure requirements are different. Generally speaking, Public Offering of Fund has very strict requirements on information disclosure, such as its investment objectives, investment portfolio and other information, while the requirements of private equity funds are much lower.
In foreign countries, some famous funds, such as Quantum Fund and Tiger Fund, are the most typical private equity funds. Among overseas private equity funds, there is a kind of fund that mainly invests in securities and other financial derivatives, among which the most "famous" fund can be regarded as hedge fund. Overseas laws stipulate that private equity funds should not use any media to advertise when attracting customers. As for the target of raising funds, the target of private equity funds is only a few specific investors, and most of the participants are individual or institutional investors with certain risk tolerance and large assets. They mainly invest in funds through private relationships. Private equity funds have a strong investment goal, which is more like an investment service product tailored for middle-class investors. General funds are kept in various custody centers such as banks and counters. As for information disclosure, the requirements of private equity funds are much lower. Private equity funds generally only need to privately announce their investment portfolios and income for half a year or a year. The government's supervision of them is far looser than that of public offerings, so there is a greater chance of obtaining high returns. It is precisely because of the above characteristics and advantages that private equity funds occupy a very important position in the international financial market.