Private equity fund operation process:
The operation mode of private equity fund is equity investment, that is, through capital increase and share expansion or share transfer, the shares of unlisted companies are obtained, and profits are made through share value-added transfer. The profit model of private equity investment funds is the same as that of securities funds, buying low and selling high, buying for selling, and obtaining long-term capital appreciation income. Specifically, the profit of industrial funds is divided into five stages:
Value discovery stage: through project search, find high-quality projects with investment value and reach an understanding of investment cooperation with the project party.
Value holding stage: after the fund manager completes the due diligence on the project, the fund completes the investment in the project company, becomes the shareholder of the project company and holds the value of the project company.
Value promotion stage. Fund managers rely on their own advantages of capital aggregation and resource integration to upgrade the strategy, management, market and finance of the project company in an all-round way, so as to improve and optimize the fundamentals of the enterprise and effectively enhance its intrinsic value.
Value amplification stage. After 2-3 years' cultivation, the value of the projects invested by the fund will be improved, and the value will be enlarged by publicly issuing shares in the capital market or selling them to industrial groups and listed companies at a premium.
Value realization stage. After the project invested by the fund is listed in the capital market, the fund manager should choose the right time and reasonable price to sell the shares of the project enterprise in the capital market to realize the ultimate value.
What should we pay attention to in the operation mode of fund raising:
Investment pays attention to safety, and any innovation of private equity fund operation mode needs to be carried out within the framework of law. During the establishment and operation of private equity investment funds, it is illegal to raise funds by way of rebate or cash withdrawal, especially to raise public funds by promising regular rebate, which constitutes the corresponding elements of illegally absorbing public deposits and needs special attention in the specific operation process.
For example, according to the different stages of private equity investment in enterprises, private equity investment can be divided into venture capital, development capital, M&A funds and pipe. Or access to seeds or early funds, growth funds, restructuring funds, etc.
The characteristics of private equity funds:
The operation mode of private equity fund is equity investment, that is, through capital increase and share expansion or share transfer, the shares of unlisted companies are obtained, and profits are made through share value-added transfer. The characteristics of equity investment include:
1, the return on equity investment is very rich. Unlike creditor's rights investment, which earns a certain percentage of interest income from invested capital, equity investment obtains dividends from the company's income according to the proportion of capital contribution. Once the invested company is successfully listed, the profit of private equity investment fund may be several times or dozens of times.
2. Equity investment is accompanied by high risks. Equity investment usually needs to go through several years of investment cycle, and because it is invested in developing or growing enterprises, the development risk of the invested enterprises themselves is very high. If the invested enterprise ends in bankruptcy, the private equity fund may lose all its money.
3. Equity investment can provide all-round value-added services. Private equity investment not only injects capital into the target enterprise, but also injects advanced management experience and various value-added services, which is also a key factor to attract enterprises. While meeting the financing needs of enterprises, private equity investment funds can help enterprises improve their management ability, expand procurement or sales channels, integrate the relationship between enterprises and local governments, and coordinate the relationship between enterprises and other enterprises in the industry. All-round value-added services are the highlight and competitiveness of private equity investment funds.