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Get to know about Private Equity Investment

Being an investor is probably very familiar with stocks. But for most financial experts, would recommend diversifying your investments into alternative investments such as private equity. Investing in alternative assets acts as a risk hedge that helps investors achieve a balanced portfolio.

A private equity investment is an investment in a privately held company as opposed to a public company. But there is a lot more to know about private equity before investing in this alternative asset class. Explore all things private equity investing in this private equity investing guide.

Private Equity - What is it?

Private equity is a type of alternative investment that uses funds not invested in private companies. In other words, private equity is money that is not traded on a public exchange.

Institutional and individual investors pool their funds to invest directly in privately held companies or participate in acquisitions of publicly traded companies. In the latter case, the company is usually removed from the stock exchange (delisting of shares).

Benefits of Private Equity

For companies, private equity can help in the following ways:

A convenient solution for raising capital without applying for a loan or listing your company.

With qualified private her equity her manager, the company can focus more on overall growth.

This entails operational changes to support the company's growth.

For investors; both individual clients and institutional investors, private equity:

It offers the opportunity to earn high returns as you can invest in the company early on before it has grown to a stage where it is ready to go public.

Opportunity to invest in private companies with great potential, such as Elon Musk's business ventures such as SpaceX and Neuralink.

Freedom from the long list of conditions and restrictions of trading on the public market.

Offers financing and tax advantages.

Things to aware

From a business perspective:

In contrast to public equity, there may be limited number of potential investors, making it difficult to raise funds.

Private equity investments may affect the business and administrative structure of the private company.

Private equity invested often demand majority stake, which may result in loss of ownership stake. From an investor's perspective:

Information about private equity investments is difficult to access and there is no specific channel for getting the latest market information. Opportunities and updates are constantly distributed between specific stakeholders and market players for specific deals.

Private equity investments are long-term investments. Liquidation can take 5-10 years. Not all investors wait that long.

It often involves a large minimum investment and can require large sums of money in the millions of US dollars.

Before get it started

Before you start investing in private equity firms, there are a few things to consider.

Non-liquidity

Private equity is not the best choice for investors with short-term goals. Private equity investment horizons are typically five to ten years or longer. This means that investors have to wait a long time before liquidating their investments. Trading in private equity on the secondary market is also partially possible. Fees and costs (H3)

Fees and expenses associated with private equity investments tend to be higher than those associated with public equity. High fees result from the active management of the system. Private equity delegates the management of investments to experienced individuals to ensure that the objective of making a profit is achieved.

Fees and expenses incurred when investing are contained in a document called an offer. Offers typically include details of the contract and terms governing the investment.

Conflict of interest

Private Equity firms often have conflicting interests with the funds it manages and, in turn, the Limited his partners who invest in the funds.

[anonymousness14]

如何分辨私募股權與私募基金？

近年隨著多個大眾化的投資平台紛紛冒起，使一向難以接觸的另類投資變得容易入門。當中最具潛力的私募股權基金，私募股權與公募基金深受投資者追捧，下文將為你介紹它們的相關資訊，進一步了解其分別和市場優勢。

私募股權基金 、 私募基金 、公募基金是什麼？

私募基金

- 是為少數投資者私募募集資金投資於非上市公司股權而設立的投資基金。

香港目前是亞洲第二大私募股權市場。截至2021年，管理資金總額將達到1730億美元，僅次於內地。香港政府近年及未來亦積極推動私募股權基金在香港的發展，包括：

立法會去年4月通過條例，為合資格私募股權基金分配的附帶權益，即與投資表現掛鉤的累計份額，提供利得稅及薪俸稅寬免。

特區政府於2020年8月推出有限合夥基金制度，8個月內吸引超過200只基金登記。在上述法案通過後，

特區政府日後亦會出台製度措施，吸引更多海載資金落戶香港。

資金來源：非公開發行

發行對象：企業投資者或超高淨值人士

資本投資：以私募股權為主

投資者數量：有限

收費：除了固定的管理費外，一般還有管理人績效費

優點: 

-迎合不同客戶的投資需求

-投資限制少 、監管較寬鬆

-投資商品種類多元化

-信息保密性佳 

缺點

-透明度較低 

-無法確認基金合約真實性

-風險較高

-流動性低

私募股權基金（Private Equity Fund）

- 是“私募基金”之一。 指以非公開方式募集資金，主要投資於私募股權的基金。 投資基金、成長資本等

資金來源：非公開發行

發行對象：企業投資者或超高淨值人士

資本投資：以私募股權為主

投資者數量：有限

收費：除了固定的管理費外，一般還有管理人績效費

公募基金

-與前面提到的私募股權和私募基金不同，公募基金不僅受到相關政府部門的監管，還向不特定的投資者募集資金。 公募基金受到嚴格的法律監管，需要滿足信息披露、利潤分配、經營限制等要求。

公募基金的目的是通過公開方式向社會公眾募集資金，主要用於證券投資。 公募基金由基金經理管理，他們在成功地從公眾籌集資金後尋找合適的投資機會，投資於股票、債券、貨幣市場工具和其他金融資產。

資金來源：公募

發行對象：不限

資金投入：主要是上市公司股權

投資者數量：不限

收取費用：固定管理費

[anonymousness14]

如何分辨私募股權與私募基金？

近年隨著多個大眾化的投資平台紛紛冒起，使一向難以接觸的另類投資變得容易入門。當中最具潛力的私募股權基金，私募股權與公募基金深受投資者追捧，下文將為你介紹它們的相關資訊，進一步了解其分別和市場優勢。

私募股權基金 、 私募基金 、公募基金是什麼？

私募基金

- 是為少數投資者私募募集資金投資於非上市公司股權而設立的投資基金。

香港目前是亞洲第二大私募股權市場。截至2021年，管理資金總額將達到1730億美元，僅次於內地。香港政府近年及未來亦積極推動私募股權基金在香港的發展，包括：

立法會去年4月通過條例，為合資格私募股權基金分配的附帶權益，即與投資表現掛鉤的累計份額，提供利得稅及薪俸稅寬免。

特區政府於2020年8月推出有限合夥基金制度，8個月內吸引超過200只基金登記。在上述法案通過後，

特區政府日後亦會出台製度措施，吸引更多海載資金落戶香港。

資金來源：非公開發行

發行對象：企業投資者或超高淨值人士

資本投資：以私募股權為主

投資者數量：有限

收費：除了固定的管理費外，一般還有管理人績效費

優點: 

-迎合不同客戶的投資需求

-投資限制少 、監管較寬鬆

-投資商品種類多元化

-信息保密性佳 

缺點

-透明度較低 

-無法確認基金合約真實性

-風險較高

-流動性低

私募股權基金（Private Equity Fund）

- 是“私募基金”之一。 指以非公開方式募集資金，主要投資於私募股權的基金。 投資基金、成長資本等

資金來源：非公開發行

發行對象：企業投資者或超高淨值人士

資本投資：以私募股權為主

投資者數量：有限

收費：除了固定的管理費外，一般還有管理人績效費

公募基金

-與前面提到的私募股權和私募基金不同，公募基金不僅受到相關政府部門的監管，還向不特定的投資者募集資金。 公募基金受到嚴格的法律監管，需要滿足信息披露、利潤分配、經營限制等要求。

公募基金的目的是通過公開方式向社會公眾募集資金，主要用於證券投資。 公募基金由基金經理管理，他們在成功地從公眾籌集資金後尋找合適的投資機會，投資於股票、債券、貨幣市場工具和其他金融資產。

資金來源：公募

發行對象：不限

資金投入：主要是上市公司股權

投資者數量：不限

收取費用：固定管理費

[anonymousness14]

How to differentiate between markets?

There are basically two types of markets which allow investors to invest capital and companies to raise capital for returns.

However, the functions of the two markets are different. The public market allows all types of investors to purchase listed securities. On the other hand, investments are accessible only to a small number of insiders, such as institutional investors and ultra-high-net-worth individuals in private markets, investments which are not publicly traded on an exchange.

Unlike public equity (stocks), private markets are less liquid due to lack of market transparency. This article provides a detailed guide of public and private investment markets.

From an investor's perspective: What are the differences? 

Let's use these points to explore the difference between public and public markets.

Return value

Liquidity risk brings high returns to private markets. This means that investors interested in private equity or other investment options should be prepared for higher returns even with lower liquidity.

Liquidity

Public markets are notorious for their high liquidity, which has recently increased significantly with the advent of many digital platforms. By contrast, the private placement market has always been illiquid. However, the growth of the secondary market, especially LP and GPS, is starting to make the market more fluid.

Volatility

Public markets exhibit higher volatility as prices are determined by the extensive trading activity of public investors. As such, stock prices may be over- or undervalued based on market sentiment and many other factors, creating risk for investors when evaluating stock prices and potential returns. Private markets are not listed, but have significantly lower volatility than public markets.

Information transparency

The dissemination of information is limited in the private market because there is no obligation to disclose information as there is in the public market. A public market fully discloses its performance and financials to investors.

From a company’s perspective: What are the differences? 

Property

Private company shares are typically held by a small group of corporate members, institutional investors, and individual shareholders. This allows companies to maintain a very active ownership approach and focus on adding value through operational improvements.

Public companies are owned and controlled by shareholders who buy and sell securities. Since stocks can be publicly traded, dilution of ownership makes it difficult for most public companies to change operations.

Loan

Public companies can generally issue new shares or use debt to grow their business. Private companies may face higher debt acquisition costs and may not be able to raise funds from public investors, but the rise of private markets means private companies have more private property and access to financing. you can get the opportunity.

Sustainability

Long-term equity ownership by private companies represents a long-term sustainability strategy. Companies are encouraged directly by their shareholders or bondholders to implement strategies that have the potential to create long-term value. There may be cases.

[anonymousness14]

Common types of Alternative Investing

When talking about investing, among the first things that one usually thinks of are stocks and bonds. While they are  popular investment vehicles, they could be highly volatile as well, and that's where alternative investments come in. Investors can seek refuge in alternative investments from the turbulence of the stock market. These investments are not typical ones, but they are necessary for a well-balanced investing portfolio. In order to help you as a novice investor make the best choices, this article will explain alternative investments and offer comprehensive guidance.

How does it work?

A straightforward definition of an alternative investment is one that does not belong to the same category as traditional investments like stocks, bonds, and cash. Financial resources like hedge funds, private equity, venture capital, commodities, and collectibles are examples of alternative investments. The category of alternative investments can also include real estate.

Since alternative investments have a smaller correlation to traditional investments than do those, for many retail investors, they are the ideal tool for portfolio diversification. Others see the drawback as the opportunity for large gains. However, this investment does carry some dangers, just like any other investment does.

Investors In Private Markets

Alternative investments typically have higher amounts and lengthier lock-up periods.Alternative investments have a distinct risk profile that not all investors may find acceptable. That is why only a specific group of individuals is allowed access to alternative investments by Hong Kong's Securities and Futures Commission (SFC). These investors are categorized as professional investors because they meet specified requirements for income and net worth.

[anonymousness14]

Get To Know Private Banking

Almost everyone enjoys having someone available at all times. This is essentially advantageous when it comes to banking or financial services because you may avoid lines, crowded tellers, and other forms of bureaucracy. A personal representative manages all of your financial needs when you use private banking.

In other words, private banking meets both your demand for a financial institution and your professional account management needs. What about private banking? By the end of this piece, you'll have made your decision and know how to proceed.

The Meaning of Private Banking 

Private banking refers to the specialized financial services that retail banks and other financial institutions provide to their rich or high-net-worth customers. Private banks are those banks that specialize in offering these premium financial services only.

What Does It Offer?

Common financial services like checking and savings accounts are included in private banking services. However, it also includes specialist services like:

Guidance on financial planning and investment strategy

Portfolio administration

Tailored financing solutions

Retirement preparation

Personalization is a key component of private banking, which essentially implies that clients are given great consideration while the bank provides services. To this end, a "private banker" or "relationship manager" is assigned to each of these clients to take care of whatever banking requirements they may have. This includes everything from setting up a jumbo mortgage to paying your normal bills.

Essentials for Bank Account Setup

The process for opening a private bank account is the same as for obtaining a conventional bank account. However, you must first confirm that you qualify for private banking.

The majority of the private banks in Hong Kong need investable assets starting at US$2 million per client, according to the private banking listings published by the South China Morning Post. For instance, the minimum asset requirement for each client at Bank of China (Hong Kong) Private Banking is $US2 million.

Alternative Investment Platform VS Private Banks 

In order to suit the financial demands of its clients, private banking offers individualized one-stop shopping for banking services. They also offer investment products on both the public and private markets, giving investors access to certain alternative investment options. Although many HNWIs are increasing their exposure to alternative assets, private banking might not be able to meet their expectations if alternatives are not their primary focus. For a diverse and modern alternative investment solution, it is advised to take into account working with a specialized alternative investment manager.