Exit Mechanism Legal Research Of Private Equity Funds In China

The most significant feature of capital is liquidity.(As an important part ofcapital market, the inexhaustible life of private equity funds is due to liquidity. It is noexaggeration to say that exit mechanism is an important measure for obtainingliquidity, which also plays a decisive role in fund raising, investment, value-added andother stages.This paper is divided into four chapters:Chapter one is about the phenomenon description on exit mechanism. with abrief introduction of the exit mechanism of private equity funds, as well as the currentsituation of China’s private equity funds.Chapter two is about the problem of China’s private equity funds. There aremainly four exit channels for Private equity funds: IPO, M&A, share repurchases, aswell as corporate clearing. The comprehensive analysis is based on the above fourareas concerning the exit barriers of China’s private equity funds, and the reasons forthese problems.Chapter three is about the enlightenment based on U.S. private equity funds exitmechanism. The reason of us U.S. private equity fund market booming is revealedthrough the analysis of U.S. public policy, tax system, multi-level structure of capital market and exit terms of private equity agreements.Chapter four is about the legal advice for the improvement of the exit mechanismof Chinese private equity funds. Based on the comprehensive analysis of China’sprivate exit status quo and extraterritorial experience, further improvement of severalaspects are significant for exit mechanism: legislation, legal services marketcultivation, construction of multi-level capital market.Of course, broaden investment and financing channels for enterprises and servicefor state entity economy development are a grand issue, exit mechanism is just onesmall part. In the long term, the future of private equity fund industry depends onChina’s capital market booming, and investors, but also depends on a fair, transparent,and honest social environment.