The Case Study Of Hunan Dakang Pasture Farming Co., Ltd. Creating Industry Buyout Fund

Since the state favorable policies, and China’s current unique market environment, the case of listed companies to set up industry buyout fund is very active in the past two years, although the establishment of industry buyout fund of listed companies has just started, but the momentum of development is remarkable.Firstly the paper is to discriminate and explore related concepts of industry buyout fund, and analyze its operation pattern, advantages and development of the status. Then conduct case research on China’s first public disclosure of listed company creating industry buyout fund events that Dakang Pasture Farming Co., Ltd. set up Paradise Dakang industry buyout fund with Zhejiang Silicon Paradise Asset Management Group. The case analysis revolve around operation risk and economic consequences of Paradise Dakang industry buyout fund. We hope to be able to do some basic research and pave the way for such a national innovation fund acquisitions mode.The main research methods are case study method, event study method and accounting research method etc.Paradise Dakang industry buyout fund was set up at September 2011, and the fund acquisited four companies which main business is pig breeding in the year between 2012 and 2014. There are plenty of risks exist in operation and management of the fund. During Paradise Dakang industry buyout fund’s operation, a lot of problems appeared actually. From the capital market point of view, the establishment of the fund caused a good market response; from the financial point of view, the fund does not bring good profit growth to Dakang Pasture Farming Co., Ltd.In general, the establishment of Paradise Dakang industry buyout fund, did not achieve the expected results, even in an embarrassing situation. From inception to the end, Paradise Dakang industry buyout fund neither bring rich profit for the Dakang Pasture Farming Co., Ltd., nor inject the project into the the listed company. This is far from the initial purpose of the establishment of industry buyout fund.Although the fund merge and acquire four pig breeding companies that layout of the pig industry around Dakang Pasture Farming Co., Ltd.’s strategic, the item companies’s business is far from expected. At the same time as the Dakang Pasture Farming Co., Ltd.’s weak business profitability, changes of controlling shareholder, changes of the enterprise strategic goal and other reasons, one of item companies, Wuhan Hexiang, fails to smooth out which led the listed company to be prosecuted by Zhejiang Silicon Paradise AssetManagement Group. Finally, Dakang Pasture Farming Co., Ltd. and Zhejiang Silicon Paradise Asset Management Group reach a settlement. They establish a new industry buyout fund and transfer all the projects of original Paradise Dakang industry buyout fund to the new fund. This from the side to prove the fund pattern can not be denied completely, but there is much room for improvement in terms of operation and management.