What does multi-level distribution penetration of private equity fund mean?

The multi-level distribution of private equity funds has many participants, and the investors and fund raisers of the project will be covered up by layers of nesting. Under this cover, if something goes wrong, it will lead to many problems. Penetration is to investigate investors, fund companies, fund sales companies, fund transaction structure and fund raisers at all levels to avoid possible risks.

Private Equity Fund

The scope of private equity funds is narrower than that of Public Offering of Fund, but they are all institutions or individuals with strong capital strength and high quality of capital composition, which makes the funds raised by them not necessarily inferior to that of Public Offering of Fund in quality and quantity. It can be an individual investor or an institutional investor.

Private equity funds play an active role in economic development. Most of the modern service industries, high-tech industries, all kinds of consumer goods manufacturing and consumer service industries that are in urgent need of development are mainly small and medium-sized enterprises and private enterprises, but the existing financial system has not provided corresponding financing channels for them. This is an area where private equity funds can make a big difference. The development of private equity fund is helpful to promote the adjustment of national industrial structure.

The real advantage of private equity funds is real marketization. Fund managers take the growth potential and benefit of enterprises as the principle of investment selection. Investors use their own funds as votes, invest the right to use scarce social production resources in the industries that need to be developed most, and invest in the most efficient enterprises in this industry, as long as the products have market and development potential, regardless of whether this enterprise is a small enterprise or a private enterprise. This can greatly improve the allocation efficiency of scarce production resources in the whole society.

At present, the development of private equity funds in China is still in its infancy. There are many problems that need to be studied: first, vigorously develop local private equity funds or accelerate the introduction of foreign capital. From the perspective of excess domestic liquidity and giving priority to sharing the fruits of economic growth, priority should be given to local funds. Overseas funds have more advantages than local funds in listing overseas, recruiting excellent managers, enterprise valuation technology and fund management experience. Of course, after the domestic multi-level market develops, the first advantage of overseas funds will no longer exist. The second is the relationship between the development of local private equity funds and the cultivation of manager market. A very important reason for the failure of private equity investment in the past is that the general manager of the enterprise is not satisfactory. The market of entrepreneurs and managers is closely related to the development of private equity funds in China. The third is the relationship between private equity funds and local governments.