Core Viewpoint - The article discusses the structured arrangements commonly found in private equity investment funds, focusing on the distribution order between priority and subordinate investors, as well as regulatory guidelines and self-regulatory rules governing these arrangements [1][3][4]. Summary by Sections Structured Arrangements in Private Equity Funds - Structured arrangements in private equity funds typically manifest in the distribution order of distributable assets, prioritizing the return of principal to priority investors, followed by subordinate investors, and then the distribution of threshold returns and remaining profits [1][3]. Regulatory Framework - Prior to June of this year, there were limited direct regulations from the CSRC and AMAC regarding the structured arrangements of private equity funds, aside from the "Asset Management New Regulations" and AMAC's guidelines on leverage ratios [4][5]. - The AMAC's guidelines emphasize that private equity funds primarily investing in listed company stocks must adhere to principles of shared benefits and risk-sharing, ensuring that subordinate investors do not bear losses when the fund's net value exceeds 1 [6][7]. Leverage and Distribution Principles - The leverage ratio for private equity funds should not exceed 1, and the distribution of profits and losses among investors must align with the principle of risk-sharing [6][15]. - The common distribution arrangements between GPs and LPs do not typically fall under AMAC's structured arrangement requirements, as the classification of GPs as investors depends on their investment purpose [10][11]. Legal Considerations - The partnership agreement under the Partnership Enterprise Law allows for personalized profit-sharing and loss-bearing arrangements among partners, provided that not all losses are borne by a subset of partners [9][10]. - Company law permits personalized arrangements for profit-sharing among shareholders, although liquidation distributions generally follow shareholding proportions [10]. Conclusion - Current common structured arrangements in private equity funds do not meet AMAC's requirements for funds primarily investing in listed companies [15]. - For other private equity funds, there are no explicit regulations on structured arrangements, but leverage ratios should generally not exceed 1 [15]. - The classification of fund shareholdings as investors in structured arrangements should be based on the purpose of their contributions, and the common distribution arrangements between GPs and LPs are generally not subject to AMAC's structured arrangement requirements [15].