Generally speaking, the subscription fee of private equity funds involves subscription fee, redemption fee, fixed management fee and floating management fee.
I. Subscription fee
Subscription fee is a one-time fee that investors need to pay when they subscribe for the fund during the fund raising period, but private placement network does not have to pay this fee, and they are free of subscription fee. Subscription fees are mainly used for marketing, sales, registration, registration and other expenses in the process of fund raising. The specific rate of subscription fee varies with different types of funds, and is usually 1%-3% of the amount of investment promised by investors.
In the subscription fee collection, it is mainly divided into out-of-price collection and in-price collection. Out-of-price collection means that investors buy 2 million yuan of private equity funds, and the subscription rate is 1%, so investors need to remit 2.02 million yuan into the bank account. The in-price charge is to buy 2 million private equity funds, and investors will remit 2 million yuan to the bank account of the raised funds. After deducting the subscription fee, the remaining money is used to purchase fund shares.
Second, the redemption fee
The raising period of private equity funds is generally 1-3 months, and it will enter a closed period at the end of the raising period. Usually, most private equity funds have redemption closure period and quasi-redemption closure period. The redemption period is generally 1-6 months, during which investors are not allowed to purchase or redeem. The closing period of quasi-redemption is generally 6- 12 months, during which investors are allowed to redeem, but usually a redemption fee of 3%-5% is required. In the industry, only a few private equity products do not charge redemption fees.
There is usually no redemption fee for holding for more than one year. The calculation method of redemption fee is: redemption fee = redemption funds × redemption rate.
Third, fixed management fees.
Fixed management fees are the remuneration paid by investors to fund managers, including trust management fees, bank custody fees, attorney fees and a series of expenses incurred in the daily operation of private equity funds. The specific rate of management fee varies with different types of funds, usually about 2% of the amount of investment promised by investors. This fee is usually accrued on a daily basis and deducted directly from the fund assets. The latest fund net value seen by investors has deducted this fee.
The calculation method of fund management fee is generally: fund management fee = total assets of the fund on the valuation date × management rate × days from the next day of the previous valuation date to the current valuation date /365.
Four, floating management fees
Floating management fee, also called the performance reward of funds, is the biggest source of income for private fund companies at present. Private equity funds should extract some profits as performance compensation to fund managers before distributing income, which is the most important income of fund managers. Formally, it can be 20% of the total profit of the fund, 20% of the profit extracted from the project, or 20% of the excess profit after deducting the guaranteed income for investors. The performance reward is also directly deducted from the fund assets.
Floating management fees can generally be divided into high water level method and non-high water level method. In the high water level method, after the product net value reaches a record high, 20% of the record high is directly deducted from the fund assets, and the product net value is the net value after deducting the performance reward. In the non-high water level method, the private equity fund manager withdraws the performance reward from the dividend, redemption and liquidation of the fund, and the investor deducts it from the fund assets at the time of redemption, and the net product value is the net value without deducting the performance reward.
The extraction method of performance reward is: performance reward = (the accumulated net value of the fund before the performance reward and specific interest are accrued on the open day-the highest accumulated net value of the fund on the historical open day) × the performance reward rate× the total number of fund units on the open day.
Verb (abbreviation of verb) abstract
Subscription fee, redemption fee, fixed management fee and floating management fee are the main expenses that investors will involve in the process of purchasing private placement. It can be seen that the overall institutional cost of investing in a private equity product is still relatively high, and these costs add up to about 3%, but it is precisely because private equity funds also have relatively high potential returns under high risks, because for many high-net-worth people, they don't care much about these related costs.