Research On The Governance Mechanism Of Private Equity Fund Organized In Limited Partnership In China

Along with China's rapid economic development, and the improving of capital market, private equity fund is developing rapidly in China. June 1,2007, the newly revised "Partnership Law" took into effect. Limited Partnership was first identified in our country. It laid a solid legal basis for taking limited partnership as China's governance mechanism of private equity fund. Nowadays, the newly established private equity fund generally take this form of organization for the advantages of limited partnership. However, this institutional innovation is still in its infancy in China. There are many problems in the internal governance mechanisms and external environment, which has seriously restrict the healthy development of private equity fund.The paper is about some realistic reflections of the governance mechanism of private equity fund based on the current economic and legal situation. It can be divided into six parts altogether. The first chapter explains the purpose and significance of selecting the subject, and makes a simple overview on the related research results at home and abroad. The second chapter introduces the general theory of private equity fund, including its concept, operation mode as well as its organization forms. Then it analyzes three types of governance mechanisms with the theories of modern contract and principal-agent. The third chapter introduces the meaning and features of limited partnership, and then analyzes the development and experience of international private equity fund, the composition and characteristics of limited partners and general partners. In the end, it summarizes the experience we can learn from the other countries. Chapter IV, the reality and external environment of our country were investigated. The fifth chapter introduces a typical private equity fund of limited partnership--Bohai stone. Its governance mechanisms were analyzed deeply. The article analyses the problems of governance mechanism, and the special contradiction between limited partner and general partner in our country. Chapter VI, it gives suggestions from two aspects:the improvement of the internal governance mechanisms and the external environment.