Research On Financing Of The Private Equity Fund In China

China is in a critical period of economic transition,under the background of insufficient domestic demand and weak external demand,we should consider serciously on how to find the point on economic growth. Support the development of small and medium-sized enterprises,especially forster the strategic emerging industries,could meet the need of promoting the adjustment of industrial structure,accelerating the transformation of the mode of ecomomic development,and achieving sound and rapid growth in socio-economic.But the development of SMEs has always been staggered by the difficulities of finacing.Private equity fund will solve the finacing problems of SMEs effectly owe to its characters,it will play an important role in promoting the development of SMEs.Private equity fund in China started late,it has not been mature,its four major aspects,including finance,investment,management and exit need to be constantly improved. This article focus on the finance of private equity fund,aims to summarize the status of finance,analysis the problem and make policy recommendations.Firstly, this paper briefly describe the theoretical basis of private equity fund,discuss its definition,characters,organization forms and operations, in addition,it describes the basic theory of finance.Secondly,through various channels to collect information,comprehensively discusses the course of development of PE in China,analyzes the sources of PE,including its structure,characters and major inverstors.Thirdly,this paper amalysis the factors which affect private equity fund,elaborates how the legal policy environment,the organizational form of fund it self and the exit channels influence PE financing.Fourthly,describes the financing of the U.S. private equity fund,summarizes its successful experience:a sound legal environment,a comprehensive policy to support PE financing and multi-level exit channels.The comparison of private equity fund financing constraints:lack of relevant legal basis,lack of a national regulatory body, unreasonable tax system, high access conditions for investors,and the exit channels are not smooth.At last, on the base of the above statement, this paper gives some countermeasures to expand the sources of funding structure and raise the scale for private equity fund:to create a perfect legal environment,to continuely promote financial innovation and capital market reforms to provide smooth exit channels for PE,cultivate muture investors,and promote relevant intermediary agencies to offer professional service for PE.