Nine characteristics of PE funds: among the 8673PE funds, there are only 124 institutions with at least three listed projects (RMB funds only). The past investment performance, team stability and assets under management of these investment institutions are uneven. Excellent PE institutions are scarce, and investors should consider the establishment time, past performance level and investment direction of their institutions when choosing PE funds. You can also refer to the characteristics of PE funds to carefully choose PE funds. However, the investment cycle of PE funds is very long, and investors should be able to withstand loneliness.

Nine characteristics of PE fund:

1. In terms of fund raising, it is mainly raised by a few institutional investors or individuals by private placement, and its sales and redemption are carried out by the fund manager through private consultation with investors. In addition, the investment method is also carried out in the form of private placement, which rarely involves the operation of the open market and generally does not need to disclose the details of the transaction.

2. More equity investment is adopted, and debt investment is rarely involved. Therefore, PE investment institutions enjoy certain voting rights in the decision-making management of the invested enterprises. Reflected in investment instruments, common stock or transferable preferred stock and convertible bonds are commonly used.

3. Generally investing in private companies, that is, unlisted companies, and rarely investing in publicly issued companies, will not involve the obligation of tender offer.

4. It is more inclined to a molding enterprise that has formed a certain scale and generated stable cash flow, which is obviously different from VC.

5. The investment period is long, generally reaching 3 to 5 years or longer, which belongs to medium and long-term investment.

6. The liquidity is poor, and there is no ready-made market for the transferor of a non-listed company to directly reach a deal with the buyer.

7. There are many sources of funds, such as wealthy individuals, venture funds, leveraged M&A funds, strategic investors, pension funds and insurance companies.

8.PE investment institutions mostly adopt limited partnership system, which has good investment management efficiency and avoids the disadvantages of repeated taxation.

9. Investment exit channels are diversified, including initial public offering, transaction sale, merger and acquisition, and buyback by the management of the target company.

There is still a lot of room for the development of PE funds in China, but there are still relatively few people suitable for PE funds. With the development of China's economy, private equity funds will be favored by more investors. After all, its rich expected annualized expected income is really mouth-watering.