China's Financial Institutions Involved In Research On The Motivation Of The Private Equity Investment

The US private equity market has become more mature during the past forty years, in comparison, our Chinese private equity market Due to China's fast economic development, the strong RMB appreciation expectation, and the development of China's capital market, more and more private equity funds have been attracted to the emerging market in these three years, they have established some of the most successful investment records in Chinese market. The private equity funds performance has also raised fresh concerns among our financial regulators and attracted phenomenal interest from our financial institutions.The history of our private equity market has showed that only a few local financial institutions adopted the financial innovation in the beginning, and the others decide to enter the market after adjusting their expectation of the income and costs of the adoption of the innovation. This thesis uses the theory of the adoption and spread of a financial innovation to explain the trends, and analyzes the reason for innovation adoption, the feasibility of innovation adoption and the reason for broad innovation spread, in the end the thesis gets a conclusion that the broad spread of the private equity innovation among local financial institutions in our financial market will have positive effects to the development of our financial market, as well as bring challenge to our financial regulation. The financial regulators should analyze the different reasons deeply so as to take more efficient and effective regulation to promote the development and control the risks of the local private equity market.