The Research On China’s Private Equity Fund Exit Of M&A

In the process of economic development, capital market shoulder theimportant mission of resources allocation.however, the lower proportion of directfinancing in China impact the functions of capital market. Under the background ofthis, the private equity fund get a larger space for development.Private equity fund is the bridge between the two financing sides, it is a toolwho allocation the social idle funds reasonablely from ineffective, inefficient localto effective and efficient local, it is the best way to get low～cost funds, and it isalso the best way for companies to introduce advanced management concepts. Thus,private equity fund has great significance for optimizing the allocation ofresources, it can solve the financing difficulties of SMEs, and promote ourscientific and technological innovation, and so on. The key to promote thedevelopment of China’s private equity fund is building a mode of operation withChinese characteristics, so that the private equity funds can operate efficiently, andthen to achieve a win-win ultimately among the investors, managers and financecompanies.The operation of private equity funds generally include four links: fund～raising, project selection, project management and exit,each step of the operationis the starting point for the next operation. Taking into account the exit is honoredthe earnings link, the paper focus on the exit of private equity funds.The exit ways of private equity funds including IPO, mergers and acquisitions,repurchase and liquidation exit. IPO and M&A exits are voluntary withdrawal itcan get a good return on investment generally. Repurchase and liquidation exits arepassive exit, it implemented generally when the corporate results are difficult toachieve, thus repurchase and liquidation exits are likely to have a loss. The privateequity fund hopes to achieve IPO exit since the IPO exit strategy can get thehighest return on investment, but the listed resources are limited, Under thebackground of the IPO channel gradually narrowed, the performance of China’s M&A market is more active than it used to be.This paper focus on the M&A exit method, it make a comprehensive andin-depth analysis about all the participants of M&A exit and its role for China’sprivate equity funds,the procedure and the mode of M&A exit and so on bycomparative analysis, case analysis and other research methods.on the basis of this,the paper puts forward some policy suggestions about promoting China’sprivate equity fund exit by mergers and acquisitions way.It’s to let entrepreneursand private equity investors make a further comprehend about the M&A exitmethod,and provide some reference for mergers and acquisitions exit practice.