Compared with public offering, PrivatelyOfferedFund is defined as public offering and private placement, or public offering and private placement according to the different ways of securities issuance and whether securities are issued to an unspecified public. A public offering is a public offering. Publicity has two meanings: the first is that you can advertise and raise money from all the people you know and don't know. The second is that the number of proposed objects is relatively large, for example, it is generally defined as more than 200 people. PrivatePlacement refers to private placement or private placement. In private, it means: first, no advertising. Second, it can only be raised from specific objects. The so-called specific target has two meanings, one is that the other party has money and certain risk control ability, and the other is that the other party is a specific industry or a specific category of institutions or people. Third, the number of private investors is generally small, such as less than 200.
Compared with Public Offering of Fund such as closed-end funds and open-end funds, private equity funds have very distinct characteristics, which makes private equity funds have incomparable advantages in Public Offering of Fund.
First, private equity funds raise funds in a private way. In the United States, children's funds and pension funds in Public Offering of Fund generally attract customers by advertising through public media. According to relevant regulations, private equity funds are not allowed to use any media to advertise, and their participants mainly join through so-called "reliable investment information" or direct knowledge of fund managers.
Secondly, in terms of fundraising targets, private equity funds are only targeted at a few specific investors, and the circle is small but not low. For example, in the United States, hedge funds have very strict regulations on participants: if they participate in the name of individuals, their annual income will be at least $200,000 within two years; If you participate in the name of the family, the family's income in the past two years is at least 300,000 US dollars; If you participate in the name of an institution, its net assets will be at least $6,543,800+0,000, and the number of participants will be limited accordingly. Therefore, the investment goal of private equity funds is very strong, which is more like an investment service product tailored for middle-class investors.
Third, unlike Public Offering of Fund's strict information disclosure requirements, the requirements of private equity funds in this respect are much lower, and the government supervision is relatively loose, so the investment of private equity funds is more hidden, the operation is more flexible, and the chances of obtaining high expected annualized returns are greater.
In addition, a notable feature of private equity funds is that fund sponsors and managers must invest their own funds into fund management companies, and the success of fund operation is closely related to their own interests. According to international practice, fund managers generally hold 3%-5% of the shares of funds. In case of loss, the shares owned by the manager will be used to pay the participants first. Therefore, the promoters, managers and funds of private equity funds are as close as lips and teeth, and the interests of honor and disgrace are consistent with * * * *, which also solves the inherent weakness of the lack of managers' interests and incentive mechanism in Public Offering of Fund to some extent.