Research On Exit Route For Private Equity Fund Based On Merger & Acquisition

As an important financial innovation, private equity fund is a financing market rising behind the bank credit and securities markets.It has a good role in promoting the development of SMEs and it plays an important role in the national economy.Due to our bank loans to the enterprises with certain conditions and limits, the stock market listing standards is extremely demanding, "financing" has become "stumbling block" on the road of development of new business.Private equity investment fund specializing in a forward-looking vision are often willing to provide financial support for high-quality start-ups, and provide support after the investment in all aspects of management, finance, strategic planning for the subject-funded enterprises, using its own resources and advantages that funding the company offers a variety of value-added services that help companies achieve extraordinary development funding. In addition, private equity investment fund industry has a keen sense of smell and unique strategic vision, which is to support general corporate innovation, creativity, entrepreneurship-oriented high-tech science and technology enterprises, potentially accelerating the transformation of scientific and technological achievements, and promote the national innovation implementation of the strategy to promote sound and fast economic development.As a financial market a new class of intermediary organizations, private equity funds plays an important role in optimizing the allocation of resources, promote scientific and technological innovation, promote economic growth and create social value, it can be a major development healthy and sustainable relationship.Private equity investment is a capital operation mode for investment purposes to obtain capital gains, its characteristic is the cycle of investment, namely investment-management-exit-reinvestment. Therefore, exit for private equity investment institutions is very important, it is the end of the capital operation, and is the starting point for the next round of investment. Only exit smoothly, private equity funds in order to obtain capital gains and enhance the reputation of the fund, continued to enhance the fund-raising ability, and then to the next round of investment funds, investment companies and continue to participate in projects to help companies develop, continue to create new investment performance, and thus sustained and healthy development.The exit of private equity investment fund are IPO, mergers and acquisitions, equity transfer, repurchase management, bankruptcy liquidation etc.. Among them, valuing the ultra high return on investment incentives, over the years, China's private equity investment fund in favor of the IPO exit. While in mature private equity market, simple operation, low cost and return moderate merger exit investment institutions has become the preferred way.China's private equity industry started late and rapid development, capital market environment, legal system, talent construction is lagging behind, has brought many problems to the exit of private equity investment fund. Qing dynasties statistics show that China's private equity industry is developing in full swing,2015 new fund 2219, is five times more than the previous year, raising the scale of up to 565 billion yuan, growth of 46%. In contrast, fund exit channels, to back the project further backlog, has reached 7862, investment institutions are under great pressure to exit. In this case, has important significance for the sustainable development of investment reasonable effective and fast way out of China's private equity industry. At present, China's economic growth slowing, the stock market slump, the stock valuation regression, the listed places scarce and have not regularly closed gate risk, IPO difficult as the private equity investment fund sustained, stable and efficient way of exit. But because of the imperfect legal system, management equity transfer, repurchase restrictions, poor operability, reliability is not strong. In contrast, mergers and acquisitions, to meet the adjustment and upgrade of industrial structure, intensive countries introduced a number of policies to encourage mergers and acquisitions between enterprises, leading to the healthy development of the merger market. Private equity investment fund is riding the stock industry and the policy of spring, vigorously promote investment projects mergers and exit, reduce the exit pressure, harvest investment returns, and promote the development of the industry.This paper analyzes the development of China's private equity investment industry and the exit status, pointed out that the private equity investment fund exit exists in the structure of the problem, combined with the industrial policies advocated by way of mergers and acquisitions exit. At the same time, this article through the case of merger exit cases revealed the risk of IPO from the analysis of mergers and acquisitions exit advantage, for private equity investment fund provides a warning and reference in the exit choice. Finally, the article on the private equity investment fund exit structure problem and how to improve the proposed merger exit mechanism, in order to exit in theory for China's private equity investment fund to provide assistance.