Contract fund is a kind of agency investment behavior based on contract principle. There is no fund charter, no company board of directors, but fund enterprises to regulate the tripartite behavior.
The fund manager is responsible for the management and operation of the fund. As the nominal holder of the fund assets, the fund custodian is responsible for the custody and disposal of the fund assets and supervises the operation of the fund manager. As the initiator of the fund, the fund manager raises funds by issuing beneficiary certificates to form trust property.
According to trust deed, the fund custodian is responsible for keeping the trust property, specifically handling securities, cash management and related agency business. Investors are holders of beneficiary certificates and enjoy investment income by purchasing beneficiary certificates and participating in fund investment. The beneficiary certificates issued by this fund show the rights and interests enjoyed by investors in investment funds.
One advantage of contractual private equity fund is that its organizational form is flexible and convenient, and the contract between investors and managers can meet different customer groups. Within the legal framework, trust deed is free to conclude various agreements.