Research On The Development Of Private Equity Fund In China And USA

Since the first Private Equity has been established in USA in 1946, which has developed for seventy years, hencefore, the foreign scholars have a in-depth research on it.The rapid development of the economy in USA was inextricably linked to the Private Equtiy Funds. However, the Private Equity is in the early stages of development and the scholars haven't formed the systematic theory, some of whom research the status or organization or exit mechanism of Private Equity, consequently, this article systematically researched similarities and differences about the financing, investment operation and exit mechanism of Private Equity in China and USA.Firstly, the article introduces the definition, classification, characteristics and operation process of the PE. Since the PE started at the earliest in the USA and developed very well, the article compares the financing channels, investment operation and exit mechanism of the PE between the USA and China; consequently, it discovers the problems existing in PE in our country. When comparing the financing channels, it refers to magnitude and sources of the capital, laws and regulations and finds that the capital of the PE fund in China is from financial allocation of the government and the gross of it is smaller than USA.With respect to investment operation comparison, it refers to organizational form, investment strategy and incentive and restraint mechanism and finds that problems existing in PE fund in our country, which are the lack of professional manager, the investment strategy easily be affected by the national policy and the magnitude is too small to put the investment in stages. Through the comparison of the exit mechanism between the USA and China, it finds the underdevelopment of the over-the-counter of the PE fund and the lack of the effective intermediary service organization. In order to solve the previous existing problems founded, the article proposes corresponding resolve measures:Firstly, it should broaden the capital sources of the PE fund, such as increase the Pension and Insurance Company's invest proportion to the PE fund, encourage the nongovernment capital to enter into the Private Equity Market. Secondly, it should promote the development of the limited partnership of the PE fund. Lastly, it should improve the exit mechanisms of the PE fund, such as develop the OTC (over-the-counter) market, perfect the intermediary service organizations.We can discover the existing problems in the development of Private Equity in our country through the comprison research between China and USA and propose the policy suggestion to promote the development of Private Equity and broaden the financing channels to individual investors and institutional investor and improve the multi-level capital market.