Private equity parent fund (PE FOF) is a fund that indirectly invests in the project company invested by PE. From the perspective of fund management, in fact, most retail investors are not very popular, because a few of them do not understand the investment procedures and methods and blindly pursue short-term interests, thus affecting the investment process and play of fund managers.

PE FOF can unite all retail investors to become institutional investors. After the accumulated funds form a certain scale, PE FOF will negotiate with the fund manager on behalf of all retail investors, so as to select high-quality PE funds.

Extended data

Advantages of private parent fund

1, spread the risk.

FOF will spread the raised funds among several basic funds, which avoids putting the risk on the fund managers who invest in a single fund. At the same time, the number of companies invested by these basic funds often exceeds hundreds, which enables FOF to gain diversity in many fields.

2. Professional management.

For investors, even if they have knowledge of one aspect of fund investment, they may lose investment opportunities because of lack of understanding of other aspects. FOF usually has comprehensive knowledge, contacts and resources in fund investment to realize investment in these fields. When investing in funds, FOF chooses the underlying funds in a professional way, which makes it easier for other investors to make correct investment decisions.

Baidu Encyclopedia-Private Parent Fund