Private Placement is relative to Public Offering. Private Placement refers to the sale of stocks to a small number of Accredited Investors (usually less than 35). This method can be exempted from the following: Registration process with the U.S. Securities and Exchange Commission (SEC). Extended information
1. Private equity funds are generally closed-end partnership funds and are not listed on the market. During the closed period of the fund, partner investors cannot withdraw funds at will. The closed period is generally 5 to 10 years, so the operation period is stable and there is no pressure to redeem funds.
2. Compared with the strict information disclosure requirements of public funds, private equity funds have much lower requirements in this regard. In addition, government supervision is relatively loose, so the investment of private equity funds is more concealed and professional. , the income returns are usually higher.
3. The success of fund operations is closely related to the self-interests of fund managers. Therefore, fund managers are extremely dedicated and can use their unique and effective operating concepts to attract specific investors. Both parties Cooperation is based on trust and contract, so moral hazard rarely occurs.
4. The investment objectives are more targeted, and investment service products can be tailored to customers to meet their special investment requirements. For example, Soros' Quantum Fund not only invests in global stock markets, but also invests heavily in foreign exchange, futures, etc., creating very high rates of return.
Reference: Baidu Encyclopedia-Private Equity