The Profit Model Of Private Equity Funds In The Context Of The Share Reform

The reform of non-tradable shares, which started in 2005, was the most important reform since the securities market of China was established. This reform ended the existence of non-tradable shares, which made all shares can be traded in the market. After this reform, the securities market of China paved its way to greater development.The reform of non-tradable shares pushed the development of privately-offered funds in our country to a totally new platform. Their organization and profit pattern have changed a lot. This article mainly focuses on the profit patterns of privately-offered funds in our country.This article first introduces the influence of the reform of non-tradable shares, and then reviews the development and profit patterns of privately-offered funds of USA, including private equity funds and private securities funds which are also called hedge funds. Then we probe into the influence the reform brings to funds'environment and five profit patterns under the background of the reform. The last part of the article is two cases.The innovation of this article is that we analyzed the profit patterns of privately-offered funds from their viewpoint, and we listed and studied the most popular profit patterns. This article successfully uncovers the veil of privately-offered funds, which has not been done by any previous paper.