2. Make a description, including fund raising, investment, sharing and risk control.
There are a group of rich people who support you, and they provide you with the funds of the scale you want.
4. There is a research team that closely follows the changes of the market and makes plans.
Have an accurate and strict system, so that your plan can be really implemented.
6. Since private placement is in a gray area, it should be able to solve some unexpected troubles.
Compared with Public Offering of Fund such as closed-end funds and open-end funds, private equity funds have very distinct characteristics, which makes private equity funds have incomparable advantages in Public Offering of Fund.
First, private equity funds raise funds in a private way. In the United States, children's funds and pension funds in Public Offering of Fund 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 so-called "reliable investment information" or direct knowledge of fund managers.
Secondly, in terms of fundraising targets, private equity funds are only targeted at a few specific investors, and the circle is small but not low. For example, in the United States, hedge funds have very strict regulations on participants: if they participate in the name of individuals, their annual income in the last two years will be at least $200,000; If you participate in the name of the family, the family's income in the past two years is at least 300,000 US dollars; If you participate in the name of an institution, its net assets will be at least $6,543,800+0,000, and the number of participants will be limited accordingly. Therefore, the investment goal of private equity funds is very strong, which is more like an investment service product tailored for middle-class investors.
Third, unlike Public Offering of Fund's strict information disclosure requirements, the requirements of private equity funds in this respect are much lower, and the government supervision is relatively loose, so the investment of private equity funds is more hidden, the operation is more flexible, and the chances of obtaining high returns are correspondingly greater.
In addition, a notable feature of private equity funds is that fund sponsors and managers must invest their own funds into fund management companies, and the success of fund operation is closely related to their own interests. Judging from the current international practice, fund managers generally hold 3%-5% of the shares of the fund. In case of loss, the shares owned by the manager will be used to pay the participants first. Therefore, the promoters, managers and funds of private equity funds are as close as lips and teeth, and honor and disgrace are integrated with the interests of * * * *, which also solves the inherent weakness of managers' interests and incentive mechanism in Public Offering of Fund to some extent.
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.
Private placement is private placement or private placement. In private, it means: first, no advertising. Second, it can only be raised from specific objects. The so-called specific target has two meanings, one is that the other party has money and certain risk control ability, and the other is that the other party is a specific industry or a specific category of institutions or people. Third, the number of private investors is generally small, such as less than 200.
In China, generally speaking, private equity fund refers to an investment fund that is set up and operated by raising funds privately for a few investors.
The characteristics of private equity funds can be seen from this:
First of all, private equity fund is a special kind of investment fund, mainly relative to public funds;
Second, private equity funds generally only raise funds in "small circles" (only for a specific few investors);
Thirdly, the operation process of the sale and redemption of private equity funds has the characteristics of private consultation and dependence on private trust.
Fourth, the investment starting point of private equity funds is usually high, and natural persons, legal persons and other organizations generally require property of a specific scale;
Fifth, private equity funds are generally not allowed to use public media for advertising, that is, they are not allowed to openly attract and attract investors;
Sixth, fund sponsors and fund managers of private equity funds usually invest with their own funds, thus forming a mechanism of interest bundling, risk sharing and income sharing;
Seventh, the regulatory environment of private equity funds is relatively loose, that is, the government usually does not strictly supervise;
Eighth, the information disclosure requirements of private equity funds are not strict;
Ninth, private equity funds have high confidentiality;
Tenth, private equity funds respond quickly and have very flexible and free operating space;
Eleventh, the return on investment of private equity funds is relatively high (that is, the probability of high returns is relatively high);
Twelfth, others.
Operation mode of private equity fund
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.
Second, customers can receive account numbers (that is, customers only need to give their account numbers to private equity funds). If it falls below 10%, the customer can automatically terminate the agreement, and the part of the profit exceeding 10% will be divided according to the agreed proportion, aiming at familiar customers and large enterprises.
Organizational forms of private equity funds
1, corporate style
The corporate private equity fund has a complete corporate structure and its operation is more formal and standardized. At present, it is convenient to set up private equity funds (such as "certain investment company") in China. Semi-open private equity funds can also operate conveniently in a flexible way, and their investment strategies can be more flexible without strict approval and supervision. For example:
(1) Establish an "investment company", and its business scope includes securities investment;
(2) The number of shareholders of the "investment company" should be small, and the investment amount should be relatively large, which not only ensures the nature of private placement, but also has a large scale of funds;
(3) The funds of the "investment company" are managed by the fund manager. According to international practice, managers charge fund management fees and interest incentive fees to enter the operating costs of "investment companies";
(4) The registered capital of the "investment company" is re-registered once a year at a specific time, and nominal capital increase and share expansion or capital reduction and share reduction are carried out. If necessary, investors can redeem their capital contribution at a specific time every year, and at other times, investors can transfer their shares by agreement or trade in the OTC market. "Investment company" is essentially a private equity fund of enterprises, which can be raised at any time, but only redeemed once a year.
However, corporate private equity funds have a disadvantage, that is, there is repeated taxation. Methods to overcome the shortcomings are:
(1) registered private equity funds in tax havens such as Cayman and Bermuda;
(2) Register the enterprise private equity fund as a high-tech enterprise (which can enjoy many preferential treatments) and register it in a place with relatively favorable tax;
(3) Backdoor, that is, in the establishment and operation of the fund, joint or acquisition of an enterprise (preferably a non-listed company) that can enjoy tax incentives, and take this as a carrier.
2. Contract type
The organizational structure of contractual funds is relatively simple. The specific approach can be:
(1) As the fund manager, the securities company chooses a bank as the custodian;
(2) raise a certain amount to start operation, open it once a month, announce the net value of the fund to the fund holders, and handle a fund redemption;
(3) In order to attract fund investors, the handling fee should be reduced as much as possible. As fund managers, securities companies charge a certain management fee according to their performance. Its advantage is that it can avoid double taxation, but its disadvantage is that it is difficult to avoid the approval and supervision of the securities management department in the process of establishment and operation.
3. Virtual style
On the surface, virtual private equity funds seem to be entrusted with financial management, but in fact they operate in the form of funds. For example, when a virtual private equity fund is set up and raised, on the surface, a trust financing agreement is signed with each customer, but these trust financing accounts are combined to operate as a fund, and when purchasing and redeeming fund shares, they are settled according to the net value of the fund. The specific approach can be:
(1) Each fund holder opens a sub-account in his own name;
(2) The fund holders * * * jointly contribute to form the main account;
(3) As the manager of the fund, the securities company manages all accounts in a unified way, and all accounts calculate the net value of fund shares in a unified way;
(4) The securities company tries to make the actual market value of each account equal to the market value calculated according to the net value of fund shares. If they are not equal, the balance will be transferred by the fund difference between the main account and the sub-account at the time of redemption.
The advantage of virtual mode is that it can avoid the approval and supervision of the securities management department on the establishment and operation of funds, and it is flexible to set up and avoid repeated taxation. The disadvantage is that it has not got rid of the shackles of entrusted financial management, fund raising needs to be further standardized, fund operation is still supervised by the securities management department, and there is a lack of development advantages in fund scale expansion.
4. Combined type
In order to give full play to the advantages of the above three organizational forms, a fund portfolio can be set up to combine several organizational forms. There are four types of mutual funds:
(1) the combination of company and virtual;
(2) the combination of company and contract;
(3) the combination of contract and virtuality;
(4) Combination of corporatization, contract and virtualization.
The present situation of private equity funds
It is precisely because of the above characteristics and advantages that private equity funds have developed rapidly and occupied a very important position in the international financial market. At the same time, it has also trained investment masters like Soros and Buffett and international financial "snipers". In China, although there is no public and legal private equity investment fund at present, there have been many non-bank financial institutions or individuals engaged in collective securities investment business, and to a certain extent, they already have the characteristics and attributes that private equity funds should have. According to reports, the total amount of existing private equity funds in China is at least 200 billion yuan, most of which have been regulated by the relevant market regulations and management regulations of the United States, and a large number of industry elites and economists have gathered. But the fly in the ointment is that they can only live in the underground world without sunshine in obscurity. After China's accession to the World Trade Organization, the opening of China's fund market is not far off. According to relevant agreements, foreign capital can enter the China market within five years, and the fierce market competition in the future can be imagined. Therefore, many people of insight call for giving private equity funds a clear legal status as soon as possible, so that they can enter the sunshine zone as soon as possible. This is not only conducive to standardizing the management and operation of private equity funds, but also conducive to creating a fair, just and open market competition environment, reducing transaction costs, promoting financial innovation, constantly creating and enriching financial products and investment channels in the securities market, and meeting the increasingly diversified investment needs of investors.