Limited Partnership Private Equity Fund Of Funds Custody Legal Issues

Since this two years, private equity of limited partnership go fast with a great potential. Owing to good incentive,restraint mechanisms,and without double taxation,it is widely welcome by investors.However, private equity of limited partnership has moral hazard and legal problem on custody of funds under the existing legal system.This article is about to discuss this subject,and bring forward solutions.This article is divided into three parts:The first chapter,exordium.This section introduces the value of the research background,research ideas and content,research methods.Limited partnership private equity fund is developping in China, but there are legal issues we need to face.This article is to discuss the custody of the funds, which will be described in the second chapter in detail.The second chapter,legal risks and problem existing in the custody of limited partnership private equity funds.This section first describes the concept of private equity of limited partnership,source of legal regulation,operation related to custody of funds.Then find out the legal risks and problem of custody,especially the operation about custody of the funds.There are both means in the course of custody:keeping by partners or managing by the bank.The former is primarily based on "agreement",which has more autonomy but higher moral hazard.The latter is learned from public fund, following the principle of "agreement and law",but the problem is high cost and complex process---this relate to managed contract,which including the subjects of law, rights and obligations and so on.The third chapter, legal solution to the security of private equity fund of limited partnership.The essence of the problems of custody of Fund is a contradiction,we can take it to resolve with a dialectics method.This method is a combination of "free" and "restriction", and this method is determined by the amount of funds of private equity partnership.Then we suppose that divide limited partnership private equity into two parts:"permit-to-self-keeping" and "managed by banks".This conception relates to private equity fund of limited partnership information disclosure,trustee's rights and obligations, the standards for bank to accept custody,etc.