The risk control of private equity investment can reduce the risk by stipulating the rights and obligations of both parties in the contract and investing in stages. According to relevant laws and regulations, private equity institutions should open special accounts to protect investors' right to know.

legal ground

Article 26 of the Measures for the Administration of Private Equity Fund Raising.

Before investors sign the fund contract, the fundraising institution shall explain the relevant laws and regulations to investors, explain the procedural arrangements such as the cooling-off period of investment, the confirmation of return visit and the relevant rights of investors, focus on revealing the risks of private equity funds, and sign a risk disclosure book with investors.

The contents of the risk disclosure book include but are not limited to:

(1) The special risks of private equity funds include the risks involved in the inconsistency between the fund contract and the contract guidelines of China Fund Industry Association, the risks involved in the fund not being managed, the risks involved in entrusted fundraising, the risks involved in outsourcing matters, the risks involved in hiring investment consultants, and the risks involved in not registering with China Fund Industry Association.