Chinese Private Equity Fund Risk Research

Private placement fund is a kind of collective investing system in which fund is financed by specific investors without public advertisement and operated with aggressive strategies that are unavailable to pubic offered fund. Though the legal status of private fund has not been established in China, private placement funds are still important institutional investors in the security market of China. Due to the characteristics of private-placement fund and the lack of legislation, there are a number of risk factors in the operating of private-placement funds.This thesis introduces the operating state of private-placement fund in China, analyzes the characteristics of the risk. Private-placement fund in China not only shares the same risks as hedge fund, but also has some particular risk of its own, for example legislation risk. Risk could be reduced to a certain degree by legalization and regulation of private-placement fund.