The Operating Mechanism And Development Direction Of Our Private Investment Funds

From the date China private investment funds occurs, it does not have a legalstatus, and the private investment funds are lack of legal protection in some stagessuch as investment and operating.For the organization forms of raising and establishing of private investmentfunds, with its constant development and growth, within the framework of law, themain compositions are cooperation private investment funds, limited partnershipinvestment funds and trusteeship private investment funds.The private equity investment fund completes the whole process fromestablishment to quit mainly according to the steps of establishment, raising,investment operating and quit. The main objects of fund-raising are institution orpersonal who correspond to Securities Investment Fund Law. In accordance withlaws and regulations, the operating funds can not be raised through publicity and thepublicity of non-public release way in market. The objects of operating investmentare mainly high and new technology industries and promising industries, theseindustries generally has the features as high growth and not into the capitalist market,and after they get the stock from the invested cooperation, the private investmentfunds will participate in management and operating of the cooperation, and lay afoundation for the future listed so as to gain profit after they quit.The private funds of our general understanding refers to the private securityinvestment funds and private equity investment funds. In the market of securityinvestment, the products and services of the original investment cooperativemechanism can hardly meet the demand from investors, and also lack of reward andincentive mechanism for funds management operators. The private equityinvestment fund completes the whole process from establishment to quit mainlyaccording to the steps of establishment, raising, investment operating and quit. Themain objects of fund-raising are institution or personal who correspond to SecuritiesInvestment Fund Law. In accordance with laws and regulations, the operating funds can not be raised through publicity and the publicity of non-public release way inmarket. The objects of operating investment are mainly high and new technologyindustries and promising industries, these industries generally has the features ashigh growth and not into the capitalist market, and after they get the stock from theinvested cooperation, the private investment funds will participate in managementand operating of the cooperation, and lay a foundation for the future listed so as togain profits after they quit.From the peculiar period in their development of private investment funds, wecan see that there are quite lots of advantages in its forms, but the supervision fromgovernment sectors is quite difficult, because the private investment funds grow fromthe market, and the operating forms of funds have many kinds of forms and hiddenfeatures.The private investment funds are lack of guiding and approval from legalsupervision system and laws and regulations. Within the existing framework of law,there will be quite chaotic cases during the investment funds supervision, and thesupervision sections do not have clear duties. There are application conflicts betweenthe supervision of many sections and regulations.In order to ensure the constant development and growth of our privateinvestment funds industries, improve the status in market economy construction inour country, and ensure to occupy a position in the international finance and capitalmarket, we not only need the supervision and guiding from laws and regulations, butboth the supervision sections and market participants of private investment fundsshould realize to ensure the directions of the industry and make progresses to thesound and steady development of our private investment funds.