Research On Private Equity Fund Management Limited Partnership

Limited partnership of private equity fund was born in the United States, andthen it began to spread around the world。 Since the newly " Partnership Law" wascarried out, the limited partnership of such organizations in the form of private equityfunds in China has made rapid development, more and more local private equity funduses this form of organization. Although it history is short, but the limitedpartnership private equity funds has broadened the financing channels for SMEs inChina and promoted the adjustment of industrial structure, improved the governanceof the relationship between principal and agent, it played a big role on China’s capitalmarket and social development. Though limited partnership private equity fundsachieved such results, this form is still in its infancy, between LP and GP, betweenfund managers and entrepreneurs,there are still many governance structure andgovernance mechanisms problems, it also restricts the healthy development of China’slimited partnership private equity funds. This paper analyzes the double governancemechanism of the limited partnership private equity fund, combined the actualsituation of our country, and made recommendations to improve the governance ofour country. The full text is divided into seven chapters: The first chapter describesthe background and significance of research methodology about this study, it gives anexplanation pf this text; Chapter II is a introduction of the limited partnership privateequity funds, including concepts, operational processes; Chapter III is a introductionabout the current development of domestic and foreign limited partnership privateequity fund, and the governance studies were reviewed, thus have a betterunderstanding of the fund and what is the research concern about; Chapter IV is theanalysis of governance structure and governance mechanisms between LP and GP,excavated the problems of governance; Chapter V is about the governance betweenfund managers and entrepreneurs, and analyze our country ’s governance situation;Chapter VI through a case of CDH analyzed the GP and LP, fund managers andentrepreneur’s double governance relationship; Chapter VII summarizes theconclusions of this study, the recommendations to improve the situation of China’slimited partnership private equity fund management, and described. the limitations ofthis study and future research directions.This paper studies suggest that our limited partnership private equity funds stillexist many problems in governance, governance structure and governancemechanism is not perfect, as commissioned by the higher agency costs, lack of spiritof the contract, the lack of information disclosure mechanism, such as exit channelsis limited. In the future, improving governance is a necessary requirement of thelimited partnership for better development of our private equity funds.