System Design Of Government Venture Capital Fund Of Funds

By effectively gathering social capital and private funds, government venture capital fund of funds extend the amount of the venture capital, provide some financial support and credit guarantee, which promote venture capital industry and national economy into rapid development. Science September 2005, when national development and reform commission issued《Interim Measures for Venture Capital Enterprises》with the other ten departments, venture capital industry of china entered the fast track of development. According to incomplete statistics, almost 50 government venture capital fund of funds were established or planed to build, which amount reach to 20billion. In most of the place which established government venture capital fund of funds and developed rapidly, the small-middle enterprises present a satisfactory development trend.Relative to the general private equity fund, government venture capital fund of funds face principal-agent problem of double——government venture capital fund of funds are commissioned to private funder, private funder entrusted the funds to fund managers. Information asymmetry in agency relationship and the inconsistency of policy objective of government and economic purposes of private funder as well as fund managers lead government to a weak position. The possible moral risk of fund manager may ignore the policy objective of government, eventually influence the original intention of government venture capital fund of funds.On the basis of hypothesis of new institutional economics, used of normative study, referencing the theoretical results and conclusions of property theory, system and its functional theory, system origin theory, transaction cost economics theory and other relative theories, property system,organizational relationships, behavior relationships,behavioral targeting and related to cost efficiency of government venture capital fund of funds were researched as the important clue of the system design. Through the perspective of new institutional economics,the agent system of fund managers, incentive system and risk control system are analyzed and established. By researching the system of government venture capital fund of funds, the possible moral risk of the fund manager was attempted to reduce, the behavior of fund manager which emphasis on economic benefits while ignore the policy objective was restricted. In the end, the incentive model was built based on the theory of reputation, which study quantitative research on the incentive system of the fund manager. In conclusion, there is an effective motivation of the reputation system under certain conditions, and the mortal risk of fund manager can be reduced.