I often hear investors asking what a private equity fund is and whether there are any thresholds for investing in private equity funds. So today I will briefly popularize the answers to these two questions. Introduction of private equity funds
Private equity funds are funds raised privately or directly from specific groups. Corresponding public funds are publicly raised funds to the general public. People usually refer to funds like mutual funds, that is, securities investment funds. In the broad sense, private equity funds include private equity funds in addition to securities investment funds. The term "private equity fund" or "underground fund" often used in China's financial market usually refers to a securities investment fund that is regulated by the competent authorities of the Chinese government and public issues beneficiary certificates to unspecified investors. A kind of non-public propaganda, that is, a collective investment made by privately raising funds from a specific investor. There are two kinds of methods, one is a contract-type collective investment fund based on the signing of an entrusted investment contract, and the other is a company-type collective investment fund based on joint investment and joint-stock company.
Investment threshold for private equity funds
On July 11, 2014, the Securities Regulatory Commission formally announced the "Provisional Measures for the Supervision and Administration of Private Equity Investment Funds", which sets out separate provisions for qualified investors in a separate chapter. The number of investors in private equity funds cannot be less than 1 million yuan. According to the new requirements, "qualified investors" should have corresponding risk identification capabilities and risk-taking capabilities. The amount invested in a single private equity fund cannot be less than 1 million yuan. An investor's net assets cannot be less than 10 million yuan and personal financial assets cannot be less than 3 million yuan, and the average annual income of an individual in the last three years cannot be less than 500,000 yuan. This is because considering that corporate annuities, charitable funds, social security funds, and investment plans established in accordance with the law and regulated by the financial supervision and management agency of the State Council, all have strong risk identification and risk tolerance. Private fund managers and practitioners have a thorough understanding of the private equity funds they manage and are therefore recognized as qualified investors.
The above is a detailed introduction to what are private equity funds and the investment threshold of private equity funds. I hope that it can help investors who want to know this knowledge. If you want to know more about financial investment, you can follow our Followme trading community.
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