Asset securitization
The process of risk isolation of illiquid assets, conversion and combination of cash flows, credit enhancement through certain methods, and ultimately conversion into liquid asset backed securities. Foreign practical experience has shown that housing mortgage loans, commercial housing mortgage loans, medium and long-term project loans, accounts receivable assets, and fee assets can all be securitized.
Risk investment
VC, abbreviated as VC, is a commonly used concept with specific connotations in China. In fact, it is more appropriate to translate it into entrepreneurial investment. In a broad sense, venture capital refers to all investments with high risk and high potential returns; Narrowly defined venture capital refers to investment in the production and operation of technology intensive products based on high-tech. According to the definition of the National Association of Venture Capital in the United States, venture capital is a type of equity capital invested by professional financiers into emerging, rapidly developing, and highly competitive enterprises.
Trust investment
There are two types of investment methods, one is participating in business operations, called equity investment; That is, the trust and investment institution appoints representatives to participate in the leadership and management of the investment enterprise; And use the investment ratio as the basis for dividing profits or assuming liability for losses. Another way is through cooperation, known as contractual investment, which only invests funds and does not participate in business management. This type of investment involves a trust investment institution allocating investment income within a certain period of time based on an agreed fixed ratio after investment, and either continuing to invest upon maturity or transferring equity and recovering the invested funds. Financial trust institutions often use the following methods when investing in production enterprises and financial companies:
(1) Long term cooperative investment: Investors do not need to agree on a payback date with their partners in advance when investing. As a long-term partner of an investing enterprise, as long as the production and operation of the investing enterprise are normal, the investment cooperation relationship will always exist.
(2) Regular cooperative investment: Regular cooperative investment refers to the investment period agreed upon by investors in advance. During the cooperative investment period, investors share operating profits and bear operating risks according to the investment ratio.
(3) Fixed dividend investment: Investors agree in advance on a fixed amount of profit sharing for a certain period of time when investing.
(4) Interest guaranteed dividend investment: Interest guaranteed dividend investment is an investment where investors agree in advance that a joint venture will pay interest regularly during the investment period based on the amount invested by the trust investment company.
Equity financing
Shareholders of the enterprise are willing to relinquish some ownership of the enterprise and introduce new financing methods through capital increase. The funds obtained from equity financing do not require the enterprise to repay principal and interest, but new shareholders will share the profits and appreciation of the enterprise with old shareholders. The characteristics of equity financing determine its wide range of uses, which can not only enrich the working capital of enterprises, but also be used for their investment activities.
Debt financing
Fixed return open investment and dark loan
Fixed return refers to the agreement between the investor and the counterparty that the counterparty guarantees the investor a fixed return regardless of profit or loss. The common types of fixed returns are:
(1) Financing characteristics: financing through payment of fixed returns
(2) Risk averse investment characteristics: Investors avoid operational risks and demand unconditional returns
(3) Entrusted characteristics: establish fixed return obligations in terms of funds, property use rights, and management rights
The main reason for fixed returns is the increase in social surplus funds, limited channels and amplitude of capital appreciation, and active search for other profit opportunities by all stakeholders. If such behavior is completely prohibited, it is not conducive to economic development. If not controlled, it will disrupt the social economy, and appropriate recognition is conducive to economic prosperity.
Overseas purchase shell listing (reverse acquisition)
Assist non listed company shareholders in controlling a shell company (listed company) by acquiring its shares, and then reverse acquire the assets and business of the non listed company, making it a subsidiary of the listed company. Shareholders of non listed companies can generally obtain a 70% -90% controlling stake in the listed company, and a typical shell listing consists of two trading steps. One is shell buying transactions: non listed company shareholders acquire shares in a listed company to absolutely or relatively control an already listed joint-stock company. The second is asset transfer transactions: listed companies acquire non listed companies and control their assets and operations. Generally speaking, buying a shell to go public is a better choice for private enterprises, but due to ownership constraints, it is not possible to go public directly.
