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 65,438+00%, the customer can automatically terminate the agreement and divide the part with profits exceeding 65,438+00% according to the agreed proportion. This is aimed at familiar customers and large enterprises.

Distribution of benefits:

In terms of fund managers' income, managers are often given only a very low fixed management fee to maintain expenses or no management fee at all, and the main income is extracted from the fund income in proportion.

As far as risk is concerned:

Internationally, fund managers generally hold 3%-5% of the shares of the fund, which will be used to pay in advance when losses occur, but the proportion of most private equity funds in China is generally as high as 10%-20%. Fund managers themselves take greater risks to ensure that the interests of investors and managers are highly consistent, to achieve incentive compatibility between them, and to better solve the drawbacks of the serious weakening of the incentive and restraint mechanism of middle managers in Public Offering of Fund.