Research On The Exit Route Of Private Equity In China

Private Equity industry has maintained rapid development in recent years,but in 2018,the recruitment,investment and withdrawal have obviously declined.With the background of stricter supervision and the gradual attention of the state,PE is facing challenges and opportunities at the same time! The successful withdrawal of projects is the key point to realize the circular investment.Only by withdrawing from one project can we better enter the next new project.Therefore,the withdrawal link should be paid attention to.In the withdrawal process,the choice of mode plays an important role.When it comes to exit,most financing enterprises or PE institutions have the inherent thinking of exit through IPO.It is difficult to hear other answers.Some people even think that as long as they choose other ways such as M&A,they are in the second place.This view is totally wrong.The author believes that IPO is not the only optimal answer,and other exit ways can also be the most appropriate first-line approach.It is worth pondering how to combine internal factors and external environment to determine the most appropriate exit mode for financing enterprises and PE institutions.We should not blindly pursue IPO and miss the best exit opportunity.At present,M&A has gradually entered the mainstream,and combined with the changes in the market this year,M&A policy has been loosening,multi-level capital market system reform has accelerated,I believe that IPO and M&A will have more room for development in the future.This paper intends to focus on the two exit modes of IPO and M&A.In the typical case of Panlong Pharmaceutical IPO,this paper reviews the process of capital injection and exit return analysis of JD Capital.After thorough analysis of the reasons for its success,it is found that besides its own strength and post-investment management of JD Capital,it also relies on the support of policy and sponsors.Kingtop Information failed in IPO,the main reason for its failure is the unsustainability of profits,and the process of IPO takes too much time to prolong the whole withdrawal cycle.How do the PE institutions deal with and break through the bottleneck flexibly and finally exit smoothly in Philisense M&A Kingtop Information? It is worth learning and accumulating experience.In the analysis of the two cases,the success or failure of the IPO is convincing to warn those institutions who blindly choose the IPO,and the successful M&A also shows the charm of M&A exit.Combined with theoretical analysis and specific operation of two cases,the conclusions of this paper are as follows: PE institutions should consider the future exit arrangements when investing in projects,and in addition to the preferred exit mode,there are also alternatives to deal with unexpected situations.The choice of exit mode is closely related to the internal conditions of financing enterprises,the initiative of PE institutions to participate and the external market environment.Therefore,we should change the inherent traditional ideas.We ought to seize the opportunity if we have the ability to sprint the IPO.Of course,we should also dare to vigorously use the exit mode of M&A and make comprehensive use of various exit channels.Judging from the future development trend,the author believes that 2019 is likely to be the year of IPO and M&A exit for PE.We can't ignore the opportunities brought by policy changes.Finally,I hope this study will help to provide reference for PE in the choice of exit mode and promote the long-term healthy development of the industry!...