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Private Equity Fund Governance Mechanism

Posted on:2012-02-07Degree:MasterType:Thesis
Country:ChinaCandidate:J ZhaoFull Text:PDF
GTID:2206330335998120Subject:Economic Law
Abstract/Summary:PDF Full Text Request
In China, rapid development of economy and prosperity of the capital market create a favorable macroeconomic environment for private equity (PE) industry. The revised 2007 Partnership Law also facilitates the development of private equity industry in our country. However, the rapid growth of investment flows has increasingly shown a lot of hardship behind it, including lagging legal system and the absence of industry self-regulation, etc. Hence, establishment of local PE governance scheme has become a crucial task for the development of internal PEs.PE as a kind of special investment scheme largely depends on the personal experience and professional quality of PE mangers and requires relatively independent decision-making power of the PE mangers. Therefore, PE is an investment scheme with strong asymmetric information and high uncertainty. According to the theory of corporate governance, information asymmetry and contract imperfection will lead to adverse selection, moral hazard and other agent problems. Therefore, an effective and efficient governance scheme is vital to PE. This thesis tries to analyze the internal governance scheme of PEs in China by focusing on the limited partnership PEs. In this thesis, governance features of PEs in the form of limited partnership, current status of governance schemes for PEs in China and existing issues to be resolved are discussed. This thesis is divided into five chapters.Chapter One analyzes governing logic for PEs and two ways to practice the governing logic, including mandatory governance and self-governance.Chapter Two discusses the internal governance scheme of limited partnership PEs respectively in terms of mandatory governance and self-governance.Chapter Three discusses the internal governance scheme of PEs in the United States and England.Chapter Four analyses the current internal governance status of PEs in China with limited partnership PEs as the focus. In addition, existing problems to be resolved regarding the PE governance are discussed in this part.Chapter Five makes several recommendations to address the existing problems regarding the PE governance.
Keywords/Search Tags:private equity, corporate governance, limited partnership
PDF Full Text Request
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