On The Protection Of Investors In Private Equity Funds

Private equity funds are for equity investments in unlisted companies.It can notonly solve the financing difficulties of small and medium enterprises, but also help theinvested enterprises enhance their value, which is helpful to promote China ’sdevelopment of the real economy. As a new investment channel, private equity fundsare being more and more concerned and favored by investors with tremendousfinancial strength.It shows the characters of high profits and high risks in the courseof its operation.High profits drive investors to participant in private equity investmentmarket, but we should not overlook the high-risk characteristic of private equityfunds. On the other hand, China has not yet issued the legal level of regulatorydocuments to supervise private equity funds, and private equity funds are of highinvestment risk due to information asymmetry and other reasons. Therefore, thisthesis aims to analyze the ways to protect the interests of investors at different stagesof the private equity fund. Specifically, the article mainly focuses on the followingparts:the market admittance conditions of investors, risk management on theinvestment process, as well as the withdrawal mechanism. In the meantime, itproposes to improve the existing legal system, provide effective protectionmechanisms, and set up special rights.