Privately Offered Fund-Private Equity Fund-What is the Privately Offered Fund?
Privately Offered Fund is one for a small number of investors in private (closed) to raise funds and the establishment and operation of investment funds, so it is called the fund raising to specific objects or "G Fund", which There are two basic ways: First, based on the signing of a contract-type investment contracts commissioned by a collection of investment funds, the second is based on a joint venture shares of corporate stock company set up a collection of investment funds.
Privately Offered Fund(Private Equity Fund) - basic information
Private Placement is relative to the public offering, is the difference between methods on the issuance of securities, based on whether or not specific to the community or a public offering of securities issued to the public the difference, defined as the public offering and private placement or public offering of securities and private equity. Fund (Fund), as an expert management of collective investment scheme from abroad, from different perspectives classification, there are dozens of kinds of funds title, such as by organizational form of division, there are contractual-type funds, corporate funds; by the establishment of mode split , there are closed-end funds, open-ended funds; by investments division, with equity funds, money market funds, options, funds, real estate funds etc.; the other point of view from the other division, with growth funds, offshore funds, umbrella funds, funds of funds and so on. But a search of the name of these funds to "private" and "Fund" into one of the official documents of the "private fund" (Privately Offered Fund) in English the word has not been found.
Private Equity Fund in the international development and characteristics of
Private Equity Fund in the international arena the rapid development of private equity funds and hedge funds in the form of major components (Hedge Fund), is to seek the greatest return on their investment and private partnership designed to issue investment instruments. Hedge funds and mutual funds (Mutual Fund) different, which is generally public offering issuance shall be open and accept the public supervision of the portfolio, hedge funds, private investment and the nature of their partnership are not subject to government control, but it does not mean its not subject to any supervision; In general, external creditors (lending bank) and supervision, within the co-investor in supervision. The development of the global hedge fund has more than 4000 kinds, with a total size of more than 400 billion U.S. dollars, although the number and size is less than the mutual funds, but the strong development momentum, the famous charge of the fund, such as Buffett, Soros's Quantum Fund and the long-term capital LTCM are hedge funds. Although hedge funds more difficult the situation two years ago, but since 2000, profitability has gone up.
Private equity fund to be rapid development in the international arena, evidence of their tenacity. This private equity fund in relation to public offering the advantages of not unrelated. Compared with the public offer funds, private equity funds have the following characteristics:
1, since private equity funds are raised to a small number of specific objects, so its investment objectives may be more focused and better meet customer specific investment requirements.
2, the Government's relatively loose regulation of private equity funds, private equity fund investment, therefore more flexible.
3, private equity funds do not like the public offering, as disclosed in detail the portfolio on a regular basis, so the investment in a more covert, less likely to follow by the market, investment income may be higher. In addition, the internal governance structure of private equity funds have more features. The general partner of private equity funds to implement the system, can effectively reduce the separation of ownership and management under the principal-agent risk. Partnership of the private equity fund is a limited partner and general partner members. A limited partner (the principal) is the real investors, general partner by investment experts, investment in human capital and the main small amount of cash. Distribution of income is a limited partnership for a larger part of the people. The investment failures, the general partner's contribution will be the first to suffer. This has created the following situation, on the one hand, generous investment incentives in income distribution as the general partner of the great power; the other hand, the general partner, the first of all take responsibility for the loss may be bound by the moral hazard. This greatly reduced the risk of principal-agent.
Private equity fund - the difference between the fund and the public offering Private equity funds and public offer fund the difference is mainly reflected in the following areas:
1, origin difference Private equity funds and public offer fund's largest investments of the Fund the main difference is that different from private equity funds for specific investors, to meet specific fund investment groups. By Private equity fund on the existence of specific objectives of the Fund, a special expectations of customers, the fund sponsor to fill the market gap, the launch of some orientation customized fund products, but also to expand sales of the size of the fund as a marketing strategy. It is this characteristic of private equity funds to make private equity contracts are the product nature of the agreement, that is, investors in consultation with the fund sponsor and jointly determine the Fund's investment direction and goals, rather than unilateral decisions by the fund sponsor. In other words, private equity investors pay more attention to specific needs.
2, the difference between laws and regulations on the In general, the public fund-raising for the majority of ordinary investors, state laws and regulations for the protection of the interests of a large number of small and medium investors, to raise public behavior (whether it is stocks or funds) are to implement more stringent control measures and more detailed The information disclosure requirements. The private equity investor is only partly due to specific groups, which can be the result of individual consultations, the general regulatory requirements can be more stringent than public offer funds, such as single stock investment restrictions relaxed (now public offering that the new fund to invest the fund is limited to 10%) , an investor holds fund shares may exceed a certain percentage (now public offering by the Fund under the different investors, not more than 3-10% of requirements), the minimum size of private equity limit be lower (now the new fund is the minimum size of 200 million), with no quarterly investment portfolio (now the new fund is a quarterly publication), and so on.
However, if the Government believes that regulation of private equity funds should also be enhanced may also make private equity funds such as the public offering the same regulatory requirements.
Then, in the Government to formulate the corresponding laws and regulations before the public offering to discuss the difference between funds and private equity funds, it can only be limited to raising the above methods. Thus, in addition to raising methods, the public offering and other distinguishing characteristics of private equity, and their respective connotations, depending on government regulation and the differences in degree of difference between the means. In terms of the nature of private equity, private funds can be only for a few investors. Large number of investment fund that is a collection of meaning, therefore, in reality, private equity is defined as the actual situation by the Government in accordance with national laws and regulations set by the regulations. In short, private equity funds and public offering a clear distinction between the fund raising is still on the way, that is publicly available to all investors, the recruitment of the book, or to specific investors, issued a letter of intent investments.
