Private placement fund refers to a securities investment fund that collects fund funds from specific investors in a non-public way and invests in securities. In fact, private equity funds, to put it bluntly, do not raise funds by public offering. Compared with Public Offering of Fund, it is a way of raising funds.

Private equity funds have the following characteristics:

Qualified investors

According to the Administrative Measures for Trust Plans of Collective Funds of Trust Companies, in order to set up private equity funds, institutions must be affiliated, and individuals cannot apply. Moreover, private equity funds are not affordable for everyone, and at worst, they are worth millions, and their annual income has exceeded 3, yuan in the last three years.

high proportion of individuals

Simply put, if you want to set up a private equity fund and find someone to invest, you must first become the largest creditor of this fund, so as to attract others to join in.

high threshold

high threshold means that people who can afford private equity funds must at least be middle class, and 1 million is the foundation for entry. Because 1 million investments wiped out a large part of people with insufficient financial strength, which limited the number of participants and ensured the nature of private placement. Secondly, ordinary investors with weak risk tolerance are isolated.

Lock-up period

Lock-up period can be understood as that you can invest, but you can't withdraw your capital just because you withdraw it. If an ordinary investor subscribes to a private equity fund, it is generally agreed that one year is a lock-up period, during which you can't withdraw your capital at will. If the investor wants to withdraw his capital, it needs to be implemented according to the contract signed by both parties. This agreement is to ensure the stability and liquidity of platform funds.

regular redemption

after the lock-up period, investors can't withdraw their funds when they are in a bad mood, but must redeem them within the fixed date of each month stipulated in the contract. It's a little beyond this village, but it doesn't mean this store.

distribution of income rights

after deducting the principal of the sponsors and investors, the fund sponsors usually distribute the sponsors' priority dividends first, and 2% of the earned income first, because they have worked hard and contributed the most. If you don't make money, you will also receive a 2% fund management fee, which is regarded as labor income. Also called 2/2 gains.

Usually, sponsors and investors will sign a "priority income clause". When the investment income exceeds a certain threshold rate of return, the fund manager can get a certain percentage of the excess investment profit according to the agreed carried interest clause. Only when the fund's investment performance is good can it get a certain percentage of return from the income.