Research On The Merger&Aquisition Exit Route For Private Equity Investments

Along with China s rapid economic development, the private equity fund, as anew type of financial intermediaries, has played an increasingly important role in thefinancial market. There are three segments in the operation of private equity fund,including financing,project selection and exit. Exit is the most important one of thethree. The main exit routes of private equity fund including IPO, M&A, Buy-backand Liquidity etc. In developed countries M&A is the main exit route, the proportionof IPO is very low, but it s opposite in China. However, as the listing opportunitiesbecome more limited and the listing regulation turn into stricter, private equity fundexit through IPO will become more and more difficult. On the contrary, due to thedomestic M&A market has become increasingly active and policy support, M&A willbecome the important exit route in the future. Therefore, this article focuses onprivate equity exits through M&A.Expounding the M&A exit theory. analysis theM&A exit trend and give suggestions on how to propel the M&A exit route of privateequity in our country.First, the paper analyzed the literatures at home and abroad on private equityfund exit routes, leads to the necessity of research on the private equity fund exitthrough M&A. Second, analyze the exit of private equity funds, include introducethe main exit ways and analyzing exit status. Then analyze the exit route of M&A, Imake objective analysis on the procedure of M&A, advantages and disadvantages ofM&A, the effects brought out by implementing M&A and some factors should beconsidered when exit through M&A. On the basis of above analysis, a typical case isanalyzed to shows the private equity funds operating practice at present. At the end,the last chapter puts forward some advices to promote the M&A exit route of privateequity in our country.