The Ecological Analysis Of China Private Equity Investment And The Relevant Research On Its Risks

private equity is an innovative financing mode. It has made up a huge market all over the world which benefits the global economy. With the development of the globalization of economy, private equity funds play an significant role in maintaining the financial market stability. And it helps cultivate multi-level capital markets, provide more SMEs’financing channels, develop corporate governance structure. Above all, it makes funds utilization more efficient and the upgrading of the industrial structure promoted.China’s private equity starts late that international private equity fond entered China in2004. After that, the local private equity gained quick development of which size and performance is astounding. In2009, the Growth Enterprise Market (GEM) opening widened private equity funds exit channel. For our country’s PE, this is an important turning point. Private equity has showed unparalleled dynamism since2010. That is the time "everyone is crazy about PE":Huge amounts of RMB fund are raised; Lots of local government officials issue new policies that promote the development of PE and improve the investment environment; There were134companies listed in the GEM.However, on the one hand, PE has a rapid development in the capital market, on the other hand, lots of small and medium-sized enterprises are faced with the problem of raising capital in the real economy. This reveals strongly that the private equity investment has to face many problems and difficulties in its early stage in our country which restrict the PE’s sound development. So it is very significant to explore the risks and come up with efficient measures to deal with them based on the current situation o in China.This paper explores the PE investment industry systematically by the PEST model and the method of integrating theory with practice on the basis of the research in our country and others. The paper puts emphasis on the research and raising the solutions of the legal risk in the equity merger&acquisition and the valuation risk in the equity investment based on the author’s practical work experience and knowledge.Chapter1:Preface. The preface focuses on the background, the significance, the framework, the research methods, the literature review, the innovative points and its shortcomings.Chapter2:The essence and history of private equity. This chapter mainly defines the concept and characteristics for private equity and clarifies the whole development process from its very beginning both in the domestic and abroad, ending up in some crucial features of this development.Chapter4:Summary and outlook. This chapter is combing the article’s context and main points systematically and giving prospect for the future of private equity.The innovation of this paper lies in the following aspects. First of all, the author explores the development of private equity by empirical analysis and economic history method, from the development history of domestic and foreign private equity investment. It takes history as a mirror and provides comprehensive vision to acquaint and understand the current development in private equity investment and to prompt risk. Secondly, according to its own experience, taking PEST for support, the author makes a all-sided research and discussion over private equity investment in China both theoretically and practically. Thirdly, the author applies the factor endowment model to the economic environment analysis of private equity, and reveals the contradiction between supply and demand in the industry.Inadequacies of the article go as follows:First, due to the inherent specificity of the private equity investment fund industry, the transparency of information is limited, so there are some difficulties and obstacles in the research of the micro market, As a result, the article puts particular emphasis on the macro analysis and research which makes it difficult to generalize the Chinese market as a whole; second, because of my limited knowledge and ability, the study of this topic is inadequate in depth, And it needs further improvement in the future...