1. How does private equity fund work? In mature markets in the United States, Public Offering of Fund, such as children's funds and pension funds, generally attract customers by advertising through public media. According to relevant regulations, private equity funds are not allowed to use any media to advertise, and their participants mainly join through the so-called "reliable investment news" or direct knowledge of the fund manager. Private equity funds in China are similar. There are two main modes of operation of private equity funds. The first is the guarantee. The foundation gives the guaranteed funds to investors and sets the bottom line accordingly. If it falls below the bottom line, the operation will be automatically terminated and the guaranteed funds will not be returned. The second is to receive the account (that is, the customer only needs to give the account to the private equity fund). If the account number falls below 10%, the customer can automatically terminate the agreement, and the profit exceeding 10% will be divided according to the agreed proportion. This mode of operation is mainly aimed at familiar customers and large enterprises. Usually, private equity foundations promise a much higher level of income than Public Offering of Fund. Second, why is the income of private equity fund higher than that of Public Offering of Fund? 1, absolute income and relative income A small part of Public Offering of Fund's income comes from subscription fees, and most of it comes from fixed management fees (generally 2% of the fund size). It's good to win relative income just by outperforming the broader market. There is a mentality of seeking nothing but nothing. As long as it is better than other public offerings and ranks high, investors will definitely pay the bill. Private equity funds also charge subscription fees, but most of the income comes from the fund's performance share, simply to create a new high of 20% for investors. In other words, if customers don't make money, the fund company will have no income, which makes the fund company and customers become the same interest group. 2. Public Offering of Fund, a stock type with flexible operation and limited operation, must have 80% positions to buy stocks, that is to say, in a bear market, you can't reduce your positions and hedge, and your investment scope is limited, so you can't invest in derivatives such as futures options. Private equity funds are flexible in operation. In case of bear market, they can not only short, but also short stock index futures and buy put options to make a profit. In a volatile market, private equity funds can make long or short fluctuations in the options market. In short, bear market and bull market can make money.