Research LP Private Equity Fund

Private equity investment in unlisted enterprise as the main investment object is away of investment, its operating carrier is private equity funds. Private equity fundscan play to the leverage of financial intermediation, the social idle funds together, tothe long-term use of capital, investment in the target enterprise, used in theproduction and operation. Private equity is an equity investment, the raise way withconcealment, mainly to private companies with high growth potential for theinvestment. Private equity investment fund capital formation quality is higher, its bigrisk, high returns. The paper found and pointed out the company type of privateequity funds question: due to the subscribed amount and time limit prescribed bylaw strictly, once in the project window period, money is easy to be idle; Under thiskind of organization form, fund managers is the fund’s "site"; Shortcomings ofdouble taxation and the fund. Trust indenture system of private equity funds: thefunds do not have the legal person status; Raising money and require money at once.Problems existing in the above two modes of fund, is due to its specific forms oforganization itself. This paper argues that to solve the above two forms of thequestion of fund, the better way is to choose limited partnership private equity fundsthis organization form. Limited partnership private equity fund of fund managers isthe "boss" funds, which greatly strengthened the fund managers responsible for theinterests of fund investors and fund; There is no double taxation shortcoming, butalso can flexibly deal with the issue of liquidity risk. This article found and pointedout that China’s PE market one of the problems is: investors always want to lowerthe amount of capital to the PE investment, get rich quick, for investment during lowflow may affect the normal operation and investment risk of failure, and the lifeestimation identification and bear ability seriously insufficient, total want to shortinvestment period, high profits. Think are the causes of such problems and theexistence: our country has not yet been perfect responsibility system and personalbankruptcy system, which increases the risk of investors, if the lower the amount ofcapital can enter PE market, few people would seek to others their investments toraise, lead to the emergence of illegal fund raising, even make other people’s moneyseduced. In order to better protect the interests of investors and prevent risk scope,solve the above problems, we should establish perfect the PE system of qualifiedinvestors access. PE qualified investors access system shall subject qualification, thecondition of investors’ assets from investors, investors risk identification ability, investors with a high risk to bear ability from four aspects to definition andspecification. This article finds and of China’s PE market are pointed out: the LPcapital contribution is always hope in fund investment management problem. Thinkthe reason is that China’s lack of perfect personal credit system and the propertymanagement system, so it is hard to control some of GP hide or transfer of property,the LP damaged his investment had to intervene to prevent GP investmentmanagement; China’s trust concept, business culture, honesty and ethics idea is notin-depth and immature; China’s PE market started late, the corresponding laws andregulations is not sound, not perfect; China’s PE market GP is relatively young,specialized level is not high, lack of experience, for investment in the field ofbusiness knowledge, business skills, not rich not mature, the LP to the credibility oflow; China’s individual LP capital savings but also for his hard work has a strongsupervision consciousness, total hope investment management intervention in GP.The above factors have contributed to China’s LP can get actively involved in PEmarket investment management. To solve the above problems, this paper presents aLP participate in PE management four patterns. PE this article found and pointed outthat the social security fund investment market investment is the main issue smallproportion is low, safety is the primary reason is that pension funds, and imperfectPE mechanism is not yet mature in China, large amounts of money into fear isdifficult to guarantee its value. Insurance institutions invest in PE’s main problem is:the China insurance regulatory commission on the standard of qualified GP is toohigh. Reason is indirect investment make hypotaxia insurance institutions ofinsurance funds, the risk is bigger. Listed companies invest in PE market the mainquestion is: the listed company not PE market stability of LP. Reason is that listedcompanies always want to get rid of the PE and independent of direct equityinvestment. Solve the social security fund, insurance institutions, listed companies inthe PE market main problems, one is to constraint specification of social securityfunds and insurance institutions of investment behavior,2it is to improve the PEmarket development specification in order to attract more social security insuranceand investment of listed companies. In this paper, the individual investors in the PEfrom geographical, age, occupation, income and so on to analysis, preliminaryprobes into the characteristics of individual investors.