Study On The Fiduciary Duty Of Private Equity Fund Managers

Lately,private equity has become a rewarded and respected way of investing.Hidden behind high rewards,huge risks happen among amounts of situations,in which fund managers fail to carry on fiduciary duty,leading to loss of principal.Being certificated large administrative power,fund managers are core of fund in the fund management and operation.In contrast,the investors take little participation in fund affairs,not even fight for civil remedy after the loss being incurred.In view of the above-mentioned facts,this thesis explores fiduciary duty of fund managers in laws and regulations of China,as well as judicial cases,taking investigation in status quo of administration supervision and management.Combined the normative research and positive research,this thesis seeks to give investors better protection in private equity investment,by means of seeking specific path to fulfill fiduciary duty of fund managers in China.In addition to the introduction,this thesis is divided into four parts as follows:The first part introduces the concept and origin of fiduciary duty of fund manager in private equity,deriving fiduciary duty of fund manager from special fiduciary relationship of parties.Then,as investors in private equity fund couldn't exit freely,the particularity of fiduciary duty of fund manager in private equity is explained,that is,fund managers therefore owe stronger fiduciary duty.Meantime,unlike public fund,the private equity is under less strictly administrative supervision,so judicial relief is the most important way of fulfilling the fiduciary duty of fund managers.The second part is to investigate the status que of fiduciary duty of fund manager in private equity.First section is the introduction of fiduciary duty of fund managers in laws and regulations of China.Second section is the analysis of judicial case between investors and private equity fund managers,found the alienation of fiduciary relationship between investors and private equity fund managers,leading the public ignorance of fiduciary duty.Final section is the study of the status of administrative supervision,the large amount of fund managers' rush-into partly leads the private equity into chaos,and breach the fiduciary duty frequently.The third part analyzes the existing problem of fiduciary duty of fund manager in private equity.First and foremost,since in the transplantation of fiduciary duty in early China,specific rules were introduced while the concept fiduciary duty were not,causing difficulties in identifying and applying to laws and regulations.Secondly,in current standard of care of duty,only general provisions is promulgated,without specific connotation and criteria to guide the judicial practice.Thirdly,investors of private equity are in the twists and turns,facing the problem of burden of proof and the absent of court,when seeking for judicial relief because of the breach of fiduciary duty.Fourthly,in the field of administrative supervision,problems include the too-lenient fund manager registration system,the lack of supervision information supply and unclear function of accusation support.Finally,the thesis puts forward some suggestions for the problems.First,make the unity of fiduciary duty standard.The concept of duty of fiduciary can be included into the principle of good faith in the civil code in the future,to figure out identification and application of the fiduciary duty.Second,the United States prudent investment rules can be reference of prudent investment law in China,as a standard of duty of care.Third,better judicial relief for investors can through three ways,including aggravate burden of proof of fund manager,the abolition of the hidden pre-administrative examination and approval in fund case,and make self-discipline organization access to participate in the legal proceedings.Fourth,in the level of administrative supervision,to raise quality and standard before and after the supervision on fund managers,disclosing more information of fund managers,improving the fund manager registration standards appropriately,as well as to improve the convergence among policies,are considerable ways.