A Record Of Lock-In Period: 15 Years Of Closed Period In Private Placement

Recently, there has been a new trend in fund investment: in order to inherit wealth, private funds with a closed period of 15 years have appeared, which is also the longest closed period of private equity products.

On September 28, gray asset issued the announcement on the establishment of gray wealth inheritance No. 5 private securities investment fund, announcing that the "gray wealth inheritance No. 5 private securities investment fund" (hereinafter referred to as gray wealth inheritance No. 5) was officially established on September 28, 2020, and passed the fund filing of China Securities Investment Fund Industry Association on the same day.

It is reported that according to the current setting, gray fortune heritage No. 5 is closed for 15 years, and can not be redeemed within 15 years. In addition, according to the plan, customers will invest an additional 30 million yuan every year.

Zhang Kexing, general manager of gray assets, believes that in the future, there may be more and more products with long closed period in the private fund industry. Because it can lock in long-term investment returns for customers.

Private placement products with a lock-in period of 15 years

"This product is not a product that we want to set for 15 years, but our old customers want to leave money to future generations, and take the initiative to customize it. Old customers think that the five-year closure period is too short, and they are worried that the funds may be spent. Therefore, it is necessary to set up a long-term closed-end product with real wealth inheritance. As for the 10-year, 15-year and 20-year-old products, they are all their own ideas and needs. " On September 30, Zhang Kexing told the 21st century economic reporter.

"This product is a landmark product for investors to realize real wealth inheritance." That's how gray assets evaluate it.

It is reported that, following the issuance of the first five-year closed-end product in 2018, gray asset has set up a series of gray wealth inheritance funds with a long-term closed-end period since December 2019. So far, seven long-term closed-end (share lock-in period) products have been successively issued. In addition to the common 3-year and 5-year closed-end products in the market, one of the gray fortune heritage 5 private equity funds is a fund with a lock-in period of 15 years.

It is reported that the recently established gray fortune heritage No. 5 requires not only regular customers who customize the product, but also several customers to participate in the investment together. The initial investment scale is tens of millions of yuan, but gray fortune inheritance No. 5 does not set the upper limit of fund-raising. Demand an additional 30 million customers a year for customized key customers - that's what customers plan to do now, but that condition is likely to change. In addition, the monthly subscription period can not be closed.

In explaining the reasons for the establishment of long-term closed-end products, Zhang Kexing said, "from the perspective of our fund managers, of course, we hope that the fund can be set for a little longer. Maybe 10 or 15 years is a better time. For example, to be a wealth inheritor, a child is now 5 years old, 15 years later is 20 years old, or the child is 10 years old, 15 years later is 25 years old After 15 years, we can almost inherit the wealth of one offspring. "

"This actually solves the problem that many customers can't hold the fund and sell them directly when their income is good. We have many products, and in the end, only 30% of the customers will be left. Most of the customers have left early, and many customers have not been able to share all the fruits of the growth of the fund. This is a very important reason why we set up a long-term closed-end fund. ”

Zhang Kexing believes that from the perspective of investment return, only a long-term investment of a stock and fund can obtain very rich returns and returns. For example, a fund product without a closed period is equivalent to holding a house in Beijing. You buy it once every six months and sell it once a year. Basically, the rise in house price has nothing to do with you, so we should set a relatively long-term closed period.

However, the so-called investors who are worried about more than 1% of the total return of Gray's products at the end of this year are only worried about the return of more than 1% in the end of the year, and some investors are worried about the total return of more than 1% in the end of 2018 Market low.

It is also found from the industry statistics that the investment income is directly proportional to the investment time. According to wind's statistics, the CSI fund index, which represents the overall return of all funds, has exceeded 5 times from 2003 to 2019, with an annualized yield of 12%. This annualized yield exceeded the US Jones index for the same period. But most fund holders do not have this kind of experience, even many people think that buying funds is a loss. One of the core reasons for the weak "sense of return" of investors is that people like to keep "timing" in fund investment, frequently apply for redemption, and can not achieve long-term holding, and even more people buy at high points and sell at low points.

Closed end fund may become a new trend

Lock in a long period means that the company's bargaining power is strong, in fact, most private equity can lock in a year is good.

Of course, there are a few products with such a long closed period of 15 years. Zhang Kexing believes that to issue this product, two prerequisites must be met: first, the old customers who are familiar with the fund manager must have obtained certain income in gray than before, and they should recognize Gray's investment philosophy, give trust and entrust, which is an important premise.

The second premise is that the customer should have certain capital strength. This investment accounts for a relatively small proportion of its total capital, and can be put for 10 or 15 years, just for the sake of getting a good return in the future.

"But to be specific, it may be more important to trust - that is, trust in a fund manager, which is the most important. And this kind of trust is very scarce. In fact, there are more customers with capital strength." Zhang Kexing said.

Looking forward, Zhang Kexing believes that "from the perspective of the whole fund management and the development of the private equity fund industry, there may be more and more products with a long closed period. From the perspective of return on investment, it has great advantages in locking in profits for customers. At the same time, China has entered an investment driven era. Many rich generation or rich second generation have a certain amount of capital and are considering how to pass on the wealth of funds. This is a very realistic problem. I believe that there may be more and more products with long closed period in the future. "

In fact, in recent years, more and more private placements have launched closed-end products, but the more common ones are products with one-year, two-year and three-year closed-end products. Gaoyi asset, Dahe investment, Jinglin asset and other products have different lock-in periods, such as Dahe investment's Nuggets three-year private equity investment fund.

And some private funds began to appear super long lock-in period. For example, Hanhe capital began to accept the subscription appointment with a lock-in period of 6 years from July 16.

For long-term closed-end products, Zhang Kexing suggests that investors should be very careful and conscientious to understand and inspect fund managers, because it is difficult to adhere to the investment philosophy of investment management companies, including fund managers, without a very deep understanding and recognition. At the same time, we should also examine the style of fund managers. In the long run, whether their investment ideas are drifting, whether they have good stability and sustainability.

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