In high-risk investment funds, the risk of PE is less than VC (venture capital), but significantly higher than that of equity funds and other hybrid funds. Of course, its income will double that of ordinary equity funds.
Risks mainly come from the following two points:
1, the form of fundraising is private placement, that is, like a limited number of investors raising funds, the fundraising targets are not public. This means that there is no supervision and no mandatory disclosure of investment information, which can easily lead to information asymmetry between fund managers and investors. Investors have no way of knowing the operation of the fund.
2. Equity investment. PE is a clear equity investment, that is, the equity of unlisted companies. It often participates in the operation of joint-stock companies by sending independent directors and building independent financial accounting systems. The characteristics of unlisted companies are, first of all, small scale, and the company's financial situation and business strategy are not made public. In addition, due to the limited scale and business, unlisted companies are often subject to greater market constraints, and poor business development or outdated industries will lead to the depreciation of the company's equity.
3. Compared with VC (Venture Capital), the risk of PE is appropriately controllable. When PE invests in the equity of unlisted companies, it is generally necessary to set up an exit plan when signing an investment agreement. In other words, what PE actually does is to acquire a company that has developed to a considerable extent, participate in management and financial planning, and then resell the company to make money. Different from pure venture capital.
Question 2: What are the risks of private equity funds? For the majority of private equity investors, the risks of private equity funds that should be most vigilant can be divided into six categories:
First, the risk of opaque information. Because private equity funds do not have strict information disclosure requirements, information opacity is the biggest risk of private equity funds. Investment planning, fund allocation, project tracking management and all other processes involving investment operation management may have insufficient information disclosure.
Second, investors' ability to resist risks is low. The reason why many investors participate in private equity investment is that they value the high returns of private equity funds, but high returns also correspond to high risks. Many investors do not have the corresponding ability to resist risks, so investment should focus on the risks of such private equity funds.
Risks of private equity funds caused by third-party fund managers. Due to the lack of strict industry access standards, there are obvious differences in fund managers' management ability, industry status and market recognition. In the same market environment, some fund managers can bring benefits to investors with accurate investment, while some fund managers may cause losses to investors.
Fourth, higher moral hazard. Fund projects are generally established in the form of partnership. However, due to professional, geographical and time constraints, investors can not effectively supervise and manage the project, so moral hazard is also a private equity risk that investors often encounter.
Fifth, project financing lacks professionalism. Project financing generally requires high practical experience and professional ability, but some private fund managers or management teams are not competent enough to effectively monitor and manage project financing.
Sixth, illegally absorb the risk of public deposits. Some private equity funds will attract investors to participate in investment by deliberately exaggerating income and concealing projects, and these private placements are likely to illegally absorb public deposits.
Question 3: What is the rate of return of limited partnership private equity funds? Is there any risk? Private equity funds in the form of limited partnership can effectively avoid double taxation, ensure the interests of operators and owners are consistent under the condition of separation of ownership and management rights through reasonable incentive and restraint measures, promote the division of labor and cooperation between general partners and limited partners, and give full play to their respective strengths and advantages; In addition, the limited partnership private equity fund has the characteristics of low threshold, simple establishment procedure, simple and flexible internal governance structure, efficient decision-making procedure and flexible benefit distribution mechanism.
Such institutional arrangements, from the legal point of view of limited partnership, limited partnership private equity funds also have the following characteristics:
1. The property of a limited partnership private equity fund is independent of the property of each partner. As an independent unincorporated enterprise entity, limited partnership private equity fund has independent property; For the debts of the partnership, firstly, the partnership's own property is used to pay off the debts, and the insufficient part is borne according to the different status of each partner; During the existence of a limited partnership, each partner may not require the division of the partnership property. Thereby ensuring the property independence and stability of the limited partnership private equity fund.
2. General partners and limited partners enjoy different rights and bear different responsibilities. In a limited partnership, the general partner carries out the partnership affairs, and the limited partner does not participate in the operation of the partnership; Limited partners are liable for the debts of the partnership to the extent of their subscribed capital contributions, while general partners are jointly and severally liable for the debts of the partnership, and may urge the general partners to seriously and cautiously carry out the partnership affairs; For limited partners, it has the advantage of controllable risks. This is just a personal opinion. If you want a detailed answer, you can go to today's talents to listen to related courses, which is still very detailed. Hmm. How interesting
Question 4: Are private equity funds risky? Any wealth management product is risky. Don't listen to the financial planner to protect the capital. If there is no risk, private placement is not allowed to protect the capital. Most of the profits must be risky at the same time, which is proportional. Private placement products vary from company to company. You should personally examine the specific strength of the company, the ability of financial planners and leaders, and whether there are any safe measures to mortgage or guarantee risks. For example, Rong Yuan Fortune in Suzhou is also engaged in private placement, but for fixed-income products, the interest is fixed, and the annual interest rate is 10%- 14%, which is similar to P2B. When the deposit arrives, the company pays the principal and interest to the user in advance, and there are many local physical products, hundreds of millions. I hope I can help you.
Question 5: What are the risks of private equity investment funds? The legal risk of private equity investment fund refers to the economic disputes caused by ignorance of legal rules, neglect of legal review and evasion of legal supervision by relevant subjects in the process of private equity investment and financing, as well as the potential or significant economic losses brought by litigation to enterprises.
The causes of legal risks usually include violation of relevant laws and regulations, breach of contract, infringement, failure to exercise the legal rights of the company, etc. Specific risks include debt default, contract fraud, blind guarantee, softening of corporate governance structure, weak supervision and failure to demonstrate the legal feasibility of investment. There are countless potential legal risks and economic losses.
First, the risk of legal status
There are two kinds of private placement, one is private equity investment and the other is private equity investment. The former refers to the non-public offering of investment in corporate equity, as opposed to the "public offering" of stocks; The latter refers to investing non-publicly raised funds in the secondary securities market. Private equity investment funds are relative to funds issued to investors (such as open-end funds).
Objectively speaking, the word "private placement" of "private equity investment fund" does give people a feeling of being illegal or wandering on the edge of the law, but in fact, private equity investment and financing only shows that it is an act of raising funds outside the open market, and it is not illegal or its legal status is unclear. Completely legal, recognized and supported by the regulatory authorities.
"Private fund" refers to "private securities investment fund", not "private equity investment fund". For domestic private equity investment funds, Securities Law, Company Law and Partnership Enterprise Law provide legal basis for their establishment, but the existing laws and regulations are still insufficient. In order to attract customers, most underground private equity funds have private commitments to customers, such as the security of deposits and the guarantee of annual returns, which are neither partnerships nor investments.
Second, the legal risk of the contract
Management contracts or other similar investment agreements signed between private equity investment funds and investors often contain provisions that are not protected by law, such as security of deposit and guaranteed rate of return.
In addition, the invalidation and improper conclusion of private equity investment agreements and the protection of trade secrets may also bring contract legal risks. The core result of negotiation between private equity investment fund and target enterprise is the conclusion of investment agreement, which is the basic legal document to determine the direction of private equity investment fund and the rights and obligations of both parties.
This process may involve three risks: first, the legal risk of failing to conclude a contract; The second is to keep the legal risks of trade secrets such as technical achievements involved in the negotiation process; The third is the legal risk of improper contracting. Strictly speaking, these risks are not contractual legal risks, but legal risks caused by incidental obligations.
Third, operational risk.
There are three main forms of private equity investment funds under the existing legal framework in China: one is contractual private equity investment funds formed through trust plans; Second, the enterprise industrial fund specially approved by the National Development and Reform Commission; Third, all kinds of investment institutions that appear in the name of investment companies and operate in the same way as private equity funds are in a state of lack of regulatory laws.
Although the operation of private equity funds in China does not conflict with the existing laws, there are no specific laws and regulations in the implementation process, which leads to the lack of unified views and practices between regulators and investors. Some bad private equity investment funds or fund managers violate the contract or the obligations of good managers, such as black-box operation, excessive trading, reverse operation, etc., which will seriously infringe on the interests of investors.
Four. Legal risks of intellectual property rights
If the project selected by private equity investment fund focuses on the core technology of the target enterprise, we should pay attention to whether there is legal risk in the intellectual property rights of the core technology. Legal risks related to intellectual property rights may exist in the following aspects:
1. All trademarks, service marks, trade names, copyrights, patents and other intellectual property rights owned or used by the target company and its affiliates;
2. List of authors, suppliers, independent contractors and employees involved in special technology development and relevant employment development agreement documents;
3. Non-patented proprietary products that do not apply for patents to ensure proprietary secrets;
4. The company's intellectual property registration documents, including domestic intellectual property registration certificate, provincial registration certificate and foreign registration certificate;
5. Trademarks, service marks, copyrights, patents and other documents that are being applied to the relevant intellectual property registration authority for registration;
6. Knowledge that is being challenged or revoked by the intellectual property registration authority ..... >>
Question 6: What is a private equity fund? Is the investment risk big? Literally, most of the funds used for special investment are private equity investment funds, and the risks are relatively acceptable. Private equity funds are more flexible than Public Offering of Fund, and many private equity fund managers are also very strong. At present, many Public Offering of Fund managers have switched to private placement.
Question 7: Is private equity investment risky? It depends on what you bought. The fixed-income fund I bought in Chaoyang Fortune can earn about 8 points a year, and there is not much risk.
Question 8: Is it risky to buy private equity funds? Domestic private equity funds still have certain risks. After all, many companies don't have much foundation and background. It is better to find a global listed company brand as a fund portfolio product with high flexibility and stability. The key is to have professionals to help you manage it, and you don't need to have a lot of relevant knowledge.
Question 9: Is private equity risky? Private placement has high returns, but it also has risks. ...
Question 10: Are private equity funds risky? Any investment is risky. It depends on how you do it. If you take a large private equity fund company, it will be relatively stable.