What should private equity funds pay attention to before redemption? How can private equity funds be redeemed?

With the rapid development of the financial market and the maturity of investor concepts, private equity funds have become an indispensable investment product in the wealth management market. However, due to the particularity of private equity products, there are restrictions on public promotion, and there are also many methods in the market that teach investors to choose excellent private equity funds. However, there is little discussion on the redemption of private equity funds.

For investors, choosing private equity funds requires caution, and the redemption of private equity funds requires even more attention. There is a significant difference in the redemption of private equity funds compared to other fund redemptions. Investors often encounter situations such as a drop in fund net value, investor redemption, or requiring capital turnover to redeem the fund. How long does it take for private equity fund redemption?What should private equity fund redemption pay attention to?

What should private equity funds pay attention to before redemption? How can private equity funds be redeemed?

Redemption of private equity funds

The redemption of private equity funds occurs between investors and fund companies. In other words, if investors lose interest in a certain fund or urgently need capital turnover and want to profit, they will tell the fund company to redeem the fund and retrieve the corresponding funds, and the fund shares will disappear simultaneously.

Compared to public funds with relatively good liquidity, private funds have relatively poor liquidity. Currently, the vast majority of private funds in the market have1-6During the closure period of a fund, investors are generally not allowed to redeem. If investors insist on redeeming, they need to pay a relatively high redemption fee, and can only redeem for free after the closure period ends.

It is worth noting that even if your private equity fund products have passed the closed period, investors may not be able to redeem them every day. Many times, redemption can only be processed on designated redemption dates, usually once a month or half a month. After the closure period of private equity funds ends, before the opening day of each month5-10Within working days, the customer will fill out the redemption application and send it to the corresponding trust company by express delivery. The net value on the open day will be the net value at the time of the private placement redemption, usually after the open day3-7Transfer funds to the investor's bank account within one working day. The specific situation should be executed according to the provisions of the private equity trust contract, and there may be differences in the regulations for different private equity products. Purchasing and querying private equity funds can be done through the private equity ranking website, where many private equity products do not charge subscription fees.

It should be noted that private equity funds do not need to redeem all of them. If partial redemption is carried out, the redemption portion is generally not less than10After redemption, the retained market value must be the minimum amount required by private equity funds, and the minimum retained amount is usually100Ten thousand, otherwise all must be redeemed.

What should private equity funds pay attention to before redemption? How can private equity funds be redeemed?

What should be noted before redemption?

Firstly, conduct a physical examination of the asset portfolio

Before redeeming the private equity funds held, investors should assess the current development stage and investment research team of the private equity company, and evaluate whether the institution is in the introduction, growth, maturity, or decline stage, as different development stages can greatly affect the net value of the product.

Secondly, pay attention to assessing the situation

The net value of private equity funds is not fixed, and changes in market conditions have a significant impact on product net value. Similar to buying and selling in the stock market, the redemption point will determine its return. Therefore, investors need to evaluate the timing of redemption and choose a good opportunity to intervene when redeeming. Before considering redeeming funds, carefully consider the compatibility between market evolution and private equity style.

Thirdly, establish stop loss and stop profit points

In private equity redemption, many investors may redeem due to product losses. Like most investments, investors need to set reasonable stop loss and stop profit points when purchasing private equity products. The market environment is unpredictable, and losses are very common for different types of funds. Of course, during a good market situation, many private equity funds also have significant profit making effects. Therefore, it is crucial to carry out stop loss or stop profit redemption at a reasonable time.

Fourthly, carefully sort out the details of the contract

Generally speaking, the redemption of private equity funds requires an application to be submitted a few working days before the opening day, and then the specific amount of redemption can be calculated based on the net value on the opening day. After redemption, funds can only be deposited into the investor's account after several trading days. The specific time limit varies depending on the contract. For investors who convert private equity products, it is necessary to carefully sort out the details of the fund contract, calculate the time difference, and retrieve the funds within a reasonable time.

In addition, there are special provisions for large-scale redemptions in private equity funds. Large redemption refers to the situation where the net redemption amount of an open-ended fund on the same day exceeds the fund size10%At this time, the fund manager may accept redemption ratios not less than the total size of the fund10%In this case, the processing of other redemption requests will be postponed. When fund investors apply for redemption, they need to choose the large redemption processing method for the redemption application between continuous redemption and cancellation of redemption.