Research On Due Diligence Issues In Private Equity Fund Projects

With the quick development of PE(private equity)investment in China these years,the quantity and scale of the investee project has gradually enlarged.DD(due diligence)investigation is necessary for PE,and the DD report is the basis for decision-making.Because PE in China is in the developing phase,there are a lot of faults exposed during the DD investigation,as a result the investigation can't expose all of the project's status objectively and actually.Furthermore,perhaps the defective investigation brings about the loss of the investor and the miss of the investing opportunities.On this thesis,the author has firstly set forth the purpose,significance,concept and theory foundation of DD.Moreover,the author has summarized the main faults confronted during the DD investigation as follows:impressionable investigation,irregular work and defective risk management.These problems lead to not exposing the actual project's status,the time-consuming and hard-work investigation,manipulating the conclusion,etc.The influence of the subjective thinking,the inferior professional skills,the thought of developing and regulation are the source of the above problems.Finally,in order to solve the problems,the author has put forward the improvement measures which are constructing employee-training system,improving institution system,constructing risk-preventing system and enhancing regulation.The PE investigator will understand the problems about investigation through the research,and furthermore can sovle the problems with the measures.With the resolution of the defaults and the efficiency-improvement,the DD investigation will reflect the investee objectively and actually,and the report of DD investigation will become the reliable foundation for the investment decision-making.