China's Development Prospects And Problems Of Private Equity Funds

Based on the development actuality of the private fund in China, this thesis analyzes the problems and defects in the aspects of operational management and legal supervision. Furthermore, referring to the developing patterns of the private fund in overseas mature markets, this thesis attempts to find out a scientific developing direction of the private fund in China."Private Fund" in this study is the fund which is raised from the specific investor for securities investment through closed issuance.With the essential feature of the closed issuance and the important characteristic of the strong ability of anti-risk, Private Fund is becoming a significant force in China stock market. Developing private fund could help to meet the various requirements of all kinds of investor and make the investor structure of our stock market improved accordingly. At the same time, it also could help to boost the risk preference difference of the market participants and, consequently, enhance the market liquidity.Developed in China for several years, private fund has been expanded to a certain scale and possess strong competence in China securities market. However, without a specific legal status, private fund encountered a lot of problem during its development in China, for example, offering and riskmanagement. The legal issue have been become a bottleneck of the development of private fund in China. Through analyzing on the developing pattern of the private fund overseas and reviewing the evolution of public fund, this study discusses some ways to conquer the obstacle in the development of private fund and put forward some specific measures from the aspects of legal supervision and operational management. This research concludes some main measures as follow to promote the development of private fund in China:Defining the legal status of private fund in China.Emphasizing the government supervision of its sponsors' qualification and the offering course.Restricting the governance on the aspects of its investment scope and percentage and the specific operation.In a word, based on giving the legal status to private fund, which is distinguished with the status of public fund, we should encourage private fund to enter into the competition in China capital market. We believe it will contribute to the prosperity of the China economy.