Legal Research On The Exit Mechanism Of Private Equity Funds

Private equity funds originated in the United States, but it started late in China.In recent years, due to the perfect system, private equity funds has been greatly expanded, and it provided a lot of funding for early-stage companies, and promoted the development of capital markets. Throughout the process among private equity funds, exit as the last link, affect the success or failure of this investment. Only through smooth exit channel, investors can successfully exit, also can obtain benefits. Currently, backward legal system affects the exit, so that multiple exits are affected, which is harmful to investment purposes. This article from the perspective of the legal system, analyzes the shortcomings of the system,make recommendations to improve the reality of the environment, and create better conditions for the exit. Firstly, the concept of private equity funds were defined, and then discusses the importance of the exit, and analyze the pros and cons about four kinds of exit. Secondly, the paper studies systems of the United States, Germany, Britain and summarize their advanced experience, and propose to establish a multi-level capital market. Thirdly, the paper analyzes the shortcomings of the legal system on private equity funds, for example: the development of China's capital market is not mature, repurchase not play a role in the market and repurchase lacks funds, as well as the conditions of bankruptcy is too high and so on. Finally, in order to solve the above problems, the article made some recommendations, measures to build multi-level capital market, and recommends that the Government should actively guide the policy to improve the repurchase, At the same time propose a solution to the lack of funds to repurchase, and finally modify laws and regulations to ensure the smooth progress of the liquidation.