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Money Under Sunshine: An Empirical Study Of Trust Contracts Of Chinese Hedge Funds, Jing Li
Money Under Sunshine: An Empirical Study Of Trust Contracts Of Chinese Hedge Funds, Jing Li
Fordham Journal of Corporate & Financial Law
This article conducts the very first empirical study exploring the contractual arrangements of Chinese hedge funds, which are organized not as limited partnerships but as trusts. Using 139 trust contracts collected by hand, this article sheds light on the structure, covenants, and compensation mechanisms used by “sunshine funds,” the local name for hedge funds in China. It shows that, while sunshine funds do have similar contractual arrangements as typical LP-organized hedge funds, they also possess many undeniable differences due to the jurisdiction-specific characteristics of China. In particular, because of the direct involvement of trust companies, sunshine funds include certain covenants …