Public offering funds are usually restricted in holding positions. For example, according to the current requirements of the CSRC, stock funds need to hold at least 80% of stock positions. On the other hand, there is no such restriction on private placement. Bull market can be leveraged and bear market can be short. This so-called flexibility is different from whether private placement can bring higher returns to investors. For example, private equity funds are small in scale, low in liquidity, high in rate, high in minimum investment and high in investment risk, and are only suitable for a few specific groups (qualified investors). In the past, the regulatory requirements for Public Offering of Fund were higher, the scale was larger, the liquidity was stronger, and it was more suitable for the public.
When some third-party financial institutions promote private equity funds, they always mention that private equity funds have fewer investment restrictions, which seems to be the advantage of private equity funds over public equity funds. Actually, this is misleading. Investors need to understand that China Securities Regulatory Commission has set such strict regulations and requirements on Public Offering of Fund in order to protect investors. The logic behind this is that any member of the public can buy public funds. Therefore, the government has the responsibility to ensure the safety and reliability of these products. Previously, the China Securities Regulatory Commission required Public Offering of Fund to regularly disclose all kinds of information, strictly supervise its positions and prohibit these funds from engaging in complex investment strategies (such as leverage, short selling, hedging, derivatives, etc.). ) This is something that ordinary people don't understand and requires daily mobility. From the perspective of product safety, the possibility of fraud and illegal operation in Public Offering of Fund is lower than that of private equity funds.
Private equity funds are only sold to a few authorized investors, so the government undertakes these? Authorized investors? More flexible than ordinary people. Frankly, these? Recognized investor? If you have more money, you can bear the loss. At the same time, they are also more? Do you understand? , so even if you lose it, you won't cause trouble. Because of this, the strategy of private equity can be much more flexible and there is much less information to be disclosed. Investors who buy private equity should first ask themselves whether they really understand what they are buying. What is the investment strategy of the fund, the way to obtain excess investment return, the risks involved, the worst case, and so on. An investment that doesn't understand these problems is to give up the armor designed by the government for you and hunt in the jungle with your bare hands. Smart investors will choose to do this.