To Explore the Incentive Mechanism of Sunny Private Placement Funds
|Keywords||Sunny Private Placement Funds contract theory the screeningproblem incentive intensity contract optimization|
Managers of Sunny Private Placement Funds have relatively centralized power in fund management and have less obligations in information disclosure, so in this fund industry, with the advantage of information, fund managers will be in the pursuit of goal of self-interest maximization and deviating from the investors as well as having incentive conflicts with investors. Incentive conflicts, occurred before or after the contract signed, are divided into "adverse selection" and "moral hazard". In modem economics, discussing the problem of those incentive conflicts mainly through contract theory, namely, under the condition of information asymmetry, by signing contract for design, the principal set up a kind of incentive mechanism to avoid the situation that the agent may deviate to the principal’s target. At the same time, the current products of Sunny Private Placement Funds in our country are mainly divided into "structured" and "unstructured" two kinds, these two kinds due to the difference of income distribution mechanism, form two different sets of contract design. This paper, based on the relevant research of contract theory, using the mathematical model, will compare and analyze the incentive mechanisms of the two kinds of Sunny Private Placement Funds from two angles of the "adverse selection" and "moral hazard", as well as deduce the features of contract incentive of these two kinds of funds. Further, by using the theory of contract and several relative conclusions, this paper will give some recommendations of incentive mechanism optimization of our Sunny Private Placement Funds.