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I. Private placement
Private placement, that is, private investment funds, refers to investment funds that are raised from qualified investors in the form of non-public offering and invested in investment targets such as stocks, equity, bonds, futures, options, fund shares, etc. ) stipulated in the investment contract, referred to as private equity fund.
Second, the advantages and disadvantages of private placement
superiority
1. Private equity funds are generally closed-end partnership funds and are not listed and circulated. During the closed period of the fund, the partnership investors can't withdraw the funds at will, and the closed period is generally 5 years to 10 years, so the operation period is stable and there is no pressure to redeem the funds.
2. Compared with the strict information disclosure requirements of public funds, the requirements of private funds in this respect are much lower and the government supervision is relatively loose, so the investment of private funds is more hidden and professional, and the return on income is usually higher.
3. The success of fund operation is closely related to the fund manager's own interests, so the fund manager has a strong professional consciousness and can attract specific investors with his unique and effective operation concept. The cooperation between the two sides is based on a kind of trust and contract, so moral hazard rarely occurs.
4. Investment targets are more targeted, and investment service products can be customized for customers to meet their special investment requirements. For example, Soros's Quantum Fund not only invests in the global stock market, but also invests heavily in foreign exchange and futures, creating a high rate of return.
5. Simple organizational structure, flexible operating mechanism and high freedom in daily management and investment decision-making. Compared with the complicated bureaucracy, private equity funds have obvious competitive advantages at the critical moment when opportunities are fleeting.
Disadvantaged
1. Non-public offering of shares has poor liquidity and cannot be publicly transferred and sold in the market; Due to the non-public way to raise funds, the entry threshold is high, and the target is generally a few specific investors. In this way, if investors withdraw their funds or have other major changes, the risk is even greater.
2. Similarly, because the target is a few investors, the information disclosure is relatively loose, and there is a danger of being killed and controlled.