Private Placement

A private placement, colloquially Placing, or private placement is a private, not public sale ( placement) of assets.

Background

Private placements are always held to the exclusion of a stock exchange ( public trading venue ) by a few individuals or institutions be addressed directly. Private placements exempt in part from the disclosure requirements such as the prospectus for capital increases.

In most cases, the prospective buyer must qualify through statutory minimum requirements to participate in the sale can ( asset threshold, the corresponding risk group according to WpHG), but always the investors involved must have a large fortune, because private placements often have a very high price per asset ( possibly several million ). The opposite forms of public distribution (public distribution ) for which it generally requires an authorization by the Financial Regulator BaFin. When Private Placement assets are sold to customers, which is already a customer relationship. With the Private Placement and regulations ( disclosure requirements, prospectus requirements, investment restrictions, financial reports) may be bypassed.

Most will be the asset by the issuer - possibly by way of an investment bank - sold directly to the investor. A secondary market, in terms of stock market usually does not exist for privately placed assets.

Examples of privately placed assets are:

  • Closed-end funds
  • Hedge Funds
  • New shares from a capital increase with exclusion of subscription rights
  • Promissory notes

Private Placement in Germany

The development of the private placement rules differs from country to country. In Germany, in addition to an existing customer relationship ( previous purchase of investment products ) must be a qualified investment and / or financial advisor relationship and Customer must expect to be unsolicited informed about more "interesting" investment products.

Private placement in the U.S.

In the U.S. private placement by the Securities and Exchange Commission is regulated. The SEC Rule 144A shall apply mutatis mutandis.

Pre-emption right
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