Some private equity funds operate according to the trust system, that is, private equity trust investment, which means that the trust company invests the funds obtained under the trust plan in equity. The advantage of adopting the trust system operation mode is that it can quickly concentrate a large amount of funds with the help of the trust platform and play the role of fund amplification. But there are also some shortcomings, such as the lack of effective registration system in the trust industry.
Limited partnership system can also be adopted, which clearly embodies the advantages of limited partnership system, such as "rich, great contribution". In operation, the limited partnership enterprise does not entrust the management company to manage the funds, but the general partner directly manages the assets and manages the enterprise affairs. Its advantage is that it only taxes partners and avoids double taxation.
The mode of "company+limited partnership" is the most commonly used operation mode of equity investment funds, in which company means that the fund manager is a company and the fund is a limited partnership. The advantage is that the company system implements the limited liability system. Once the fund faces bad conditions, the management company with limited liability can become a risk barrier, thus reducing the personal risk of the manager.