The difference between fund sponsors and managers

The difference between fund sponsors and managers Hong Kong Information Communication-： PE is an investment that buys low and sells high，Reliable projects can achieve high returns within 2 to 3 years，Because high risk and high return are linked，Therefore, the risk control measures for PE projects must be very rigorous.。

PE involves four parties，Respectively, the fund sponsors and managers (i.e. GP，general partner)、Fund investors (i.e. LP，limited partners)、Investment projects (generally specific enterprises)、Custody bank (responsible for the custody of the fund amount、transfer)。 1What are fund sponsors and managers?

The difference between fund sponsors and managers: Fund sponsors + managers are mainly served by private equity fund management companies，Its main responsibility is to initiate、Recruitment、Manage funds。Fund managers mainly earn fund management fees (generally 2% of fund shares) and performance fees (generally 20% of fund income)。Once the fund raising is completed，Management fee income is fixed，As for performance fees，It all depends on the quality of the project and the ability of the fund manager.。

In order to earn higher profits，Fund managers are also motivated to do better~

1. Launch fund：generally，Private equity fund management companies will launch several types of funds，Each fund corresponds to different products，Such as by industry classification (specialized in investing in high-tech industries)、Classified by the stage of the company (specialized in investing in PRE-IPO companies、Specializing in investing in New OTC companies), etc.。
2. Raise funds：Take private equity funds that specialize in investing in PRE-IPO companies as an example.。Management companies will look for some PRE-IPOs(will be listed)companies making equity investments，For example, after private equity fund companies have been screened,，Determined to raise 50 million shares of equity for Company A，The sales staff of the fund company need to find customers to purchase the equity funds of the project through non-public means within an agreed period of time (such as 3 months)。

The reason for emphasizing the "non-public" method，First, such projects involve greater risks，No publicly disclosed information

Require

，Not all investors can tolerate such risks；Second, private equity fund companies will incur costs in research and other aspects when screening projects.，Private equity fund companies that raise funds privately can have exclusive access to fund management

cost

and a 20% share of subsequent fund income，It can cover its upfront research costs and other costs and earn profits。

Third, the number of statutory LPs for private equity funds is limited.，Fund managers tend to find a small number of large investors to invest privately，Instead of focusing on retail business。Many PE funds have investment thresholds，Such as *500,000。

1. Manage funds：The fund manager has the obligations and rights to manage the fund，For example, the fund manager can send a representative to the board of directors of the invested company，have certain power，Determine the purpose of the funds raised。

2Talked so much，What are the benefits of PE? Hong Kong Information Communication-： four words：“Buy low, sell high” (arbitrage between different markets with time differences)。

“Buy low, sell high” is the original intention of investing，Assume that the fund manager is reliable、The investment project is of high quality and can be successfully listed within 2 to 3 years.，"Buy low, sell high" means buying the original shares of the project company at a low price (assuming you buy the original shares of Company A at 5 yuan per share)，High-quality project company A has appreciated in the first round of valuation before listing (assuming it rose to 8 yuan per share)，Withdrew from the company after its successful IPO.，The appreciation rate at this time is the highest - it is similar to what we usually call "new stocks"，That is, I bought the original shares of Company A at a low price before it was listed.，Wait until company A is successfully listed，I can successfully "buy new stocks" and exit without going through the lottery.，Earn high profits，Refer to data from Oriental Fortune Network，This income is generally 2 to 4 times (that is, Company A’s new shares rise to 16 to 32 yuan per share)。

The above appreciation process may take 1 to 3 years，for PE projects

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