Research On Completing The System Of Protecting To The Investors Of Private Equity Fund

“Bohai Industrial Investment Fund” was formally established in2006and locatedin Tianjin city. With approval of the State Council, the establishment of “BohaiIndustrial Investment Found” plays an important landmark role in the development ofthe equity investment found in China and it indicates that the equity investment foundis beginning to move in the main stage arena of the capital market in our country. Asrecovering of the economic environment and growing of the economic strength, theequity investment found develops rapidly in a short period. According to statistics ofthe Qingke Venture2011annual research report of China private equity investment,235equity investment founds which shall invest on the Mainland China emerged andcompleted found raising in2011, this quantity amount of the equity investment foundis2.87times as many as the quantity amount in2010, up to40.7%. In addition to thebooming of the equity industry, related issues are produced, and investors’ interestscannot be fully protected as the relevant rules and regulations are imperfect. Thispaper is studying form the angle of the whole coherence in the system design, andputting forward suggestions against the insufficiency of the legal protection ofinvestors in private equity fund in limited partnership.This paper has four parts:Part I is summarization of this paper, primarily describes the private equity fund in simple, explains the main organizational form of private equity funds in China, andpoints out that the main object of this article is the private equity fund in limitedpartnership. And in the first part, this article conducted a simple analysis of the logicalrelationships between the four systems of private equity funds—qualified investorssystem, management system, information disclosure system and self-discipline system,and it also points out this paper will discuss on the perfection of these systems byusing the coherence theory.Part II mainly describes the importance of the coherence theory in the systemdesign. This paper adopts the contrastive method and introduces the coherence inthe system design of private equity funds in the United States, reflecting the mainpurpose of this article that only adhere to the coherent analysis method can form ascientific system which meeting the requirements of industry development.Part III focuses on the present situation of Chinese private equity fund investorprotection system and analyses the reasons for this situation. This article chooses thefour systems of private equity funds—qualified investors system, management system,information disclosure system and self-discipline system to discuss. By studying theprovisions of these system of the applicable law and analyzing the phenomena ofdamaging the interests of investors and other aspects, providing a fully practicesupport for the following analysis.Part IV is the central part of this article, mainly introduces the author’s overallconception to improve China’s private equity fund investor protection system. Thispart starts with the principles to which should adhere about perfecting China privateequity fund investors in theory, then puts forwards several recommendations fromsystem design to improve the protection system of Chinese private equity fund. Itmainly by establishing perfect investors access system, primarily prescribe thecompetence of the investors from number control and asset limits. After determineinvestors access system, and then determine the general partner system. As theestablishment of the qualified investors system is favorable for selecting the highrisk-identifying and high risk-bearing investors into the field of private equity funds.So in the design of general partner system, it mainly through the perspective of construction of credit system of general partners to restrict the general partner. Theinformation disclosure system and the industry self-discipline system are alsodesigned on the base of the aforesaid system improvement. In the design of the entiresystem, this paper upholds the coherent theory.