The Research Of Private Equity Funds' Trading Opportunities In National Equities Exchange And Quotations Market Under Market Making Policies

The National Equities Exchange and Quotations(NEEQ) market has caught a lot of attention after applying market making policies. The purpose of this paper is to check if the increasing volume of the NEEQ market as well as other factors has already been, or will be, good enough for Chinese Private Equity funds(PEs) to regard the market as a major route of divestment.This paper began with the introduction of PEs' development in China, then described Chinese PEs' great divesting pressure caused by 2008's investing peak. After discussing PEs' necessity for a new route of divestment, the NEEQ market was generally introduced and the development of this market was proven to be sustainable. After that, the comparison among NEEQ market and other major A-stock market was carried out, and NEEQ market with market making policies was proved to be a proper, or even the best divestment choice for Chinese PEs for its lower barriers, lower costs, almost the same IRR with other IPO divestment routes and much higher certainty. Finally, two profit models in NEEQ market other than divestment was recommended to PEs. To build a longterm cooperation relationship with brokers and make co-investment, and to become market maker.