A Study On Development Of Private Equity Of China

Private equity investment is now in a period of rapid development, and the proportion of the world’s financial markets got rapid ascension. In recent years, China’s private equity market is developing rapidly, becoming an integral part of financial market in China. However, the development of private equity investment in our country is still in the primary stage that fund-raising, investment and exit exist many problems, what is largely limits the development of China’s private equity market. In the procedure of private equity investment which contains project selection, negotiation, signing, investment management and exit, any problem is likely to lead to the failure of the whole investment projects. So, the study of the development of private equity investment in China and effectively solving the existing problems is of great significance to the development of the future.This paper introduces the theory of private equity investment first, and on the basis of the current situation, the development of private equity investment of our country is analyzed. Capital financing market and investment market in China are very active in 2014 that the quantity and amount of capital financing market and investment market is a record high and the quantity and amount of investment projects is mainly in real estate and the internet industry. The ways of project’s exit are more diversified, although proportion fell, IPO is still the main way. From the three aspects of financing enterprises, investment institutions and the external environment, the problems and their causes of China’s private equity market are analyzed, then this paper takes PPG for example of failure, analyzes the reasons of receiving funds investment and the cause of the failure and points out the errors of investment institutions’ work in the due diligence phase and the incorrect decisions of financing institutions in such aspects as products, advertising, industrial chain led the firm to failure. Finally, combined with the case, aiming at the problem of China’s private equity market, this paper puts forward some suggestions.