Research On The Protection Of Investors In The Limited Partnership Private Equity

In recent years,private equity in China has developed rapidly,among which the limited partnership is the most common form.However,the limited partners' interests in private equity are frequently limited and violated.Since the investors supply capital for the limited partnership and provide a solid foundation for the existence and operation of the limited partnership private equity.If only we offer the effective protection of the interests for investors,can we maintain their confidence,maximize the value of the limited partnership,and improve the efficiency of resource allocation.Also,we can promote the sustained and healthy development of securities market.Based on this,this paper analyses the content and risk of the interests of investors of the limited partnership private equity.Drawing on the legislative experience of the United States and China's national conditions,this paper makes recommendations for investors' rights protection,in order to maintain investors' confidence in private funds and then promote the healthy and orderly development of the fund industry.The first chapter describes the structure of the limited partnership private equity and the roles played by the limited partners and general partners.Then it analyzes the characteristics of the limited partnership private equity to clarify the differences from corporation private equity and trust private equity.This chapter also reviews the concept and types of investors to clarify the objects of legal protection and their characteristics.The second chapter analyzes several rights given by the “Partnership Law” and beneficiaries that investors in trust should enjoy.The chapter focuses on distribution rights,participation rights and the information right.The third chapter examines the different aspects of risks faced by fund investors.The risks can be mainly divided into three types: the external environment risk,internal management risk and information disadvantage risk.The external environmental risk comes mainly from illegal fund-raising trap in real life.The internal management risk is mainly based on the lack of fund managers' fiduciary duty and insider control.The information disadvantage risk on the one hand is the risk of adverse selection and moral hazard caused by asymmetric information,and on the other hand is caused by the flaws of the provisions about the limited partners' right to know in “Partnership Law”.Based on the aforementioned problems,the fourth chapter puts forward some suggestions to provide effective protection of legitimate rights and interests of investors of the limited partnership from several aspects: strengthening fiduciary duties of fund managers,rationally allocating management rights,improving fund managers restraint mechanism and perfecting the limited partners derivative suit system.Protecting the legitimate rights and interests of investors is not only the driving force of sustainable development of securities market,but also is a top priority for each country's securities regulation.Protection of investors in limited partnership private equity should be combined with the system of limited partnership,while maximizing guarantee of the interests of investors from external supervision and freedom of contracts.