A Legal Study On The Mechanism Of Withdrawal Of Private Equity Funds

Private equity funds are one of the new financing and investment mode in last two decades,through a variety of ways to help their portfolio companies and optimize their managementstructure to get the value of the company’s growth brought about by capital appreciation. Privateequity fund investments are generally longer term, after successfully obtaining capitalappreciation, they must consider how to exit from the investment companies. Exit is the lastprocess of investment, but also reflect the investment results of the most important stage.Privateequity funds are withdrawn from the equity investment by enterprises to realized investment gainsultimately.While private equity funds has been officially included in the legislative agenda of the NPCStanding Committee, but at this stage is still not relevant laws and regulations to ensure privateequity exit smoothly. This paper discussed several private equity funds exiting way and discussedthe obstacles to its existence in practical applications, drawing on the experience of foreignmature markets, design and improve our legal requirements of the exit mechanism,aimed for thelegal perfection.Research paper is divided into four parts:Presents an overview of private equity funds and introduce the advantages and disadvantagesof four withdrawal ways, including initial public offerings, stock transfer, share repurchase andclearing.Introduced the the market and legal systems of the private equity funds of the United States,Germany and Britain.Contrast between the States and the enlightenment to China.Describes the application status of the four ways to exit in our country, as well as theirrespective legal obstacles.The fourth chapter envisages an improved legal system for the exit of private equity funds inchina.