Research On The Operation Model Of China Buyout Funds

Cases of M&A in China have increased greatly in2013.quantity and amount of M&A cases reached the peak in history. Establishing buyout funds is a new way in equity trading, which plays an important part in the adjustment of industrial structure, the financial structure optimization and the improvement of company internal structure. In view of the positive performance and favorable policies of this market, more and more foreign funds take parts in M&A market in China. Dozens of American and European companies, such as goldman sachs, carlyle, huaping and TPG have invested in M&A market in China. Some Japanese and Korean companies established new buyout funds recently. although domestic buyout funds developed quickly in China, but there are many disadvantages in these funds comparing to foreign buyout funds. These disadvantages are that domestic funds came up late, and many uncertainties exists. Research in the ways of domestic buyout funds development is weak, so it’s important to improve it. Foreign buyout operation process is mature.In this article we will analysis this process-funds initialization, equity trading, investment, further management, exit. This analysis can help us to find a new way suit to the development of domestic buyout funds. we will learn a successful M&A case-New Bridge and SDB case. this case will help us to make some useful suggestions in initialization, equity trading, investment, further management and exit. Our government should take efforts to encourage and support the development of professional security buyout funds. The key is to prove the method of equity trading and to solve the problems which hinder the exit process.