The connection between private equity funds and private equity companies? Can you give me an example?

In fact, the terms private equity fund and private equity company are often misused and confused in China.

Compared with public offering, private offering is defined as public offering and private offering according to the different ways of securities issuance and whether securities are issued to an unspecified public or publicly.

Private placement is a kind of private placement, and private placement can also be other types of financing such as creditor's rights. The translation of PE (private equity) into "private equity fund" in many places in China is obviously caused by people who are not familiar with the financial market. PE is a concept relative to public offering, and its translation is "private equity financing" or "private equity financing".

And "private equity company" or "private equity fund" is a company engaged in "private equity financing" for customers. These two translations are easy to mislead readers. The name of private placement company is neither because it is private nor because it is a joint-stock company, but because it is a company engaged in private placement, that is, a company engaged in private placement financing for customers, that is, a company engaged in private placement investment. The sources of funds for these companies are also private. In the United States, one-third of the capital of private equity companies is invested by general partners, who are responsible for finding investment opportunities and making investment decisions, so the success or failure of mergers and acquisitions depends on the ability of general partners. Another two-thirds of the capital is contributed by investors, who are generally pension funds, financial investment institutions or wealthy individuals. They are called passive limited partners, and they and the general partners form a limited partner enterprise, which generally operates for 10- 15 years.

Private equity investment in a broad sense refers to the equity investment covering all stages before the initial public offering (IPO) of an enterprise. That is, the investment in enterprises from seed stage to maturity before IPO. Private equity investment in a narrow sense mainly refers to the private equity investment part of mature enterprises that have formed a certain scale and generated stable cash flow, mainly refers to the private equity investment part in the later stage of venture capital. In China, private equity investment refers to the latter to distinguish it from VC.

KKR company in the United States is a typical representative of private equity companies. KKR's full name is Kohlberg kravis Roberts, 1976. Kravis, his cousin George Roberts and their mentor Jerome Kohlberg) * * * jointly founded KKR Company, whose name is derived from the initials of their surnames. KKR Company was born for acquisition. Like wild wolves, they use loan funds to buy companies with good operating conditions or excellent assets. They once bought more than 40 companies at an exaggerated price of $70 billion, which made them famous for leveraged buyouts. From 65438 to 0985, KKR began to focus on large-scale acquisitions and led a large number of capital players such as Morgan Stanley and Lehman Brothers to participate in large-scale acquisitions, thus promoting the rapid development of corporate mergers and acquisitions in the United States. In the takeover battle of KKR, the most famous is the hostile takeover of tobacco giant Beeskow (JRJ) from 1988 to 1989. This large-scale acquisition cost 3 1 billion dollars, which caused a sensation in the United States and attracted worldwide attention, making it difficult for other capital companies on Wall Street to reach.

Recently, in China, words such as "private equity fund", "underground fund" or "private equity investment fund" which are often used in financial markets are specialized words in China, and there is no direct corresponding word abroad. It often refers to a collective investment that is not publicized and privately offered to specific investors, as opposed to a securities investment fund that is supervised by the competent department of our government and publicly issues beneficiary certificates to unspecified investors. There are basically two ways, one is the contractual collective investment fund based on signing the entrusted investment contract, and the other is the establishment of shares based on * * * *.

Joint-stock company enterprise collective investment fund.

In fact, if "private equity fund" is related to the domestic situation, the more accurate translation should be hedge fund.

Like private equity funds, private equity companies also enter the securities market, but unlike private equity funds, they buy a company instead of obtaining the stock price difference. The main business of private equity companies is to buy and sell companies (both listed and unlisted), and then reorganize or split or IPO, and private equity funds will eventually sell the company and get a huge price difference. When private equity groups acquire enterprises, they usually use one-third of their own funds and the other two-thirds through borrowing. After the acquisition, they usually operate for four to five years.

China Private Equity Fund Billboard in 2007 (according to the statistics of financial websites)

Fund Name Fund Manager's Total Assets Weekly Income (%) Four-week Income (%) Cumulative Income (%) Ranked in the Wind and Cloud

Silicon Valley Fund Silicon Valley Fund 93,802,848 0.00%-3.07%1383.84%1

Wealth Fund Zhou Jie12,000,000 0.00% 0.00% 433.8+0% 2

Laughing like the wind Hu Yuan 5,796,7661.28%-3.90% 387.57% 3

Bojiang Fund Xu 5,466,743 5.22%-13.02% 317.31%4

Yanjin arranged a good brother-in-law privately14058723 0.04% 3.83% 222.94% 5.

Ding Ying Fund Ding Ying 8,507,1006.06%1.64% 216.76% 6.

Elite Fund Elite 4648155 3.64%12.08% 207.438+03% 7

Quantum Fund Suntime19,434,831-13.63% 5.62% 201.20% 8

Sunshine Fund Suntime146,228,909-12.49% 6.84%193.94% 9

Life Fund Life Insurance 69,071,803-13.63% 5.64%192.99%10.