Research On Balance Of Interest Of Limited Partnership Private Equity Funds

Private equity funds were born in the United States,which can play the role of leverage of financial intermediation to bring a new financing channels to the invested enterprises,injects funds to the discovered valuable corporation to promote their rapid growth,meanwhile providing a high-yield investment channels for society idle funds.Limited partnership was the mainstream selected form of private equity funds,with the advantages of flexible internal governance structure,and fully incentive and restraint mechanisms.It will make the fund manager’s professional experience and extensive relationships and the investor’s surplus funds effectively combined and complement each other to achieve common development of both sides.However,limited partnership private equity funds are still at the initial development stage in China.There are still many problems in terms of external legal policies and internal control mechanisms.Since fund managers and individual investors were in the relationship of partners,as well as the agency relationship,the mutual coexistence of two legal relationship of interest exists so that create the interest consistency of both fund managers and individual investors,conflict of interests at the same time was inevitable.Therefore,it is necessary to construct the mechanism of balancing the interests of a limited partnership private equity fund,to found the fairness and justice of protection of all parties’ interest,and to help to regulate the order of private equity investment and promote the sustainable development of private equity investment market.This study was using methods of combination of theory and practice,which can be separated into four parts beside the introduction and conclusion.First,study on the related theories such as Beyond Property Right Theory,Agency Theory and Stakeholder Theory.Review and comment on domestic and international research.Second,start with the main concept for balance of interests of limited partnership private equity fund,analyze the performance and reason for the conflict of interests of all parties of the funds.Suggest on the establishment of interest balance mechanism of Limited Partnership Private Equity Fund from the perspective of value selection and business arrangement.Third,use an actual case to introduce its situation and problems encountered by the balance of interests.Finally,with the United States arrangements on balancing the interests of the private equity fund in policy,legislation and limited partnership agreements,as well as the introduction of a successful story of balancing of interests in the domestic market,to make the conclusion of conflict of interest problems so that to set a proposal to resolve the problems of the case fund.