A Study On Exit Mechanism Of Private Equity Fund In China

Along with China's rapid economic development, the private equity fund, as a new type of financial intermediaries, has begun to play an increasingly important role in the financial market. There are three steps in the operation of private equity fund, including financing, project selection and exit. The exit mechanism is one of the most important problems, because only with smooth and sound exit mechanism can we ensure that the private equity fund operates in a virtuous circle. For lack of the financial system design, there are still some barriers in the exit mechanism of private equity fund, which seriously restrict the development of private equity fund market in our country.The paper is about some realistic reflections of the exit mechanism of private equity fund based on the current economic situation. It can be divided into five parts altogether. The first chapter explains the purpose and significance of selecting the subject, and makes a simple overview on the related research results at home and abroad, which provides some valuable references for the next phase of in-depth study. The second chapter introduces the general theory of private equity fund, including its concept, reasons for its birth and developments as well as its operation mode, which makes us get a deeper understanding of private equity fund on the macroscopic view. Meanwhile, the paper's research point is limited to the narrow concept of private equity fund, which lays a solid precondition for the further research. The third chapter explains the exit mechanism of private equity fund in a systematic and comprehensive viewpoint. In particular, it sums up ten steps of exit mechanism. Then it explores the specific operation mode on the basis of reasonable combination of related steps through their universality and particularity. The relative clear thread embarks on a complete and valuable idea for the research on realistic problems. The fourth chapter analyses the current situation and problems of exit mechanism of private equity fund in a simple and profound term. The last chapter puts forward several recommendations on the improvement of exit mechanism of private equity fund on the basis of former analysis of relative theories and practical problems. It suggests that the merger and acquisition, instead of IPO, should become the main exit path of private equity fund in the next few years. At the same time, we should develop the multi-level capital markets, such as the secondary market, to enrich exit modes of private equity fund, which is also the final purpose of writing this paper.