What Are the Different Types of Private Placement Investments?

Private equity investment, also known as private equity investment (Private Equity Investment) is an equity investment in an unlisted company. The broad range of private equity investment includes Development Finance, Mezzanine Finance, and Infrastructure (Infras-tructure). , Management buyouts or leveraged buyouts (MBO / LBO), restructuring (restructuring) and partnership investment funds (PEIP), etc.

Private investment

Private equity originated in the United States. In 1976,

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There are three main types: public offerings, sales or mergers and acquisitions, and corporate capital restructuring.

Private equity investment is a long-term investment. It takes a long process from discovering the project, investing in the project, and finally achieving profitability and exiting the project. There are many risks in the entire project operation process, such as value evaluation risk, commission risk and exit. Institutional risks, etc., investment institutions need to manage these risks.

1. Risks of private equity investment

In private equity investments, due to the high cost of agency and

For foreign companies,

Control of the company

The importance of return on investment (as opposed to other long-term strategies such as market share)

Withdrawal requirements (length, method)

Most financial investors only contribute capital. In addition to participating in the company's major strategic decisions at the board level, they generally do not participate in the day-to-day management and operation of the company and are unlikely to become potential competitors. Once you invest, it is difficult for financial investors to control their investment. Therefore, you have to choose a management team with high growth and trustworthy management team.

Project selection and feasibility check-due

Private equity as

In order to further regulate the behavior of shareholders of equity fund management companies, strengthen the supervision of the establishment and disposal of equity fund management companies, ensure the orderly transfer of equity, and encourage strong, honest, responsible, and long-term investment concepts to participate in fund management companies. To maintain the healthy and stable development of the fund industry and protect the legitimate rights and interests of fund share holders, in accordance with laws, administrative regulations and rules such as the Company Law, the Securities Investment Fund Law and the Administrative Measures for Securities Investment Fund Management Companies The notice on the establishment of the fund management company and the disposal of equity is now notified as follows:

"1", the name shall comply with the "Registration Regulations for the Registration of Names", and the name of an investment enterprise that has reached the scale is allowed to use the word "investment fund".

"2", the industry term in the name can use the words "venture investment fund, venture capital fund, equity investment fund, investment fund" and other words. "Beijing" as an administrative division allows the use between trade names and industry terms.

"3", fund type: "The registered capital (the amount of capital contribution) of the investment fund company shall not be less than 500 million yuan, all of which shall be contributed in the form of currency, and the paid-in capital (the actual amount of capital contribution) shall not be less than 100 million yuan when it is established Within 5 years, the registered capital will be fully committed in accordance with the company's articles of association (partnership agreement). "

"4", the investment amount of a single investor is not less than 10 million yuan (the general partners in a limited partnership enterprise are not covered by this restriction).

"5", at least 3 executives have experience in management and operation of equity investment funds or related business experience.

"6", the business scope of fund-type enterprises is approved as: non-securities business investment, investment management, consulting. (Fund-type enterprises may apply to engage in other business projects outside the above business scope, but shall not engage in the following businesses:

(1) Loans issued;

(2) Publicly traded securities investment or financial derivative transactions;

(3) Raising funds in an open manner;

(4) Provide guarantees for enterprises other than invested enterprises.

"7", Managed fund company: Investment fund management: "The registered capital (the amount of capital contribution) is not less than 30 million yuan, all of which are contributed in the form of currency, and the paid-in capital (the actual amount of capital contribution) was paid upon establishment

"8", the investment amount of a single investor is not less than 1 million yuan (the general partners in a limited partnership enterprise are not covered by this restriction).

"9", at least 3 executives have experience in equity investment fund management operations or related business experience.

"10", the management scope of the management fund enterprise is approved as: non-securities business investment, investment management, consulting.