Compared with the ordinary investors, professional investors can participate in private placement activities and have access to more investment opportunities.
To know more about the investment products offered through private placement, you may look at the investment products and services offered to the high-end private banking customers by intermediaries. These investment products or services are usually indicated for professional investors only. In fact, private placement can cover a wide range of investment products. You may have heard of some of the following privately placed investment products, such as private equity funds adopting different investment strategies or investing in different assets, various unauthorized funds, equity-linked products or structured products, non-retail bonds, and private placing of shares of listed companies. The notorious accumulator, sometimes known as the “I kill you later” contract, is also a privately placed investment product for professional investors only.
SFC’s List of Publicly Offered Investment Products covers all investment products and their offering documents that are authorized by the SFC and can be offered to the Hong Kong public, including authorized collective investment schemes/funds, retail bonds and structured investment products, as well as stocks of listed companies, warrants and Callable Bull/Bear Contracts traded on the Exchanges.
You may want to know the difference between the public offering investment products and privately placed investment products. Since private placement activities target the wealthier investors, the minimum investment amount will be higher. In addition, privately placed investment products do not need to be authorized by the SFC. As such, product disclosure in their offering and marketing documents are not necessarily adequate. If professional investors do not have sufficient investment knowledge and experience, it would be difficult for them to fully understand the products with complicated features and structures.
31 October 2018