Research On Investment Risk Management-based On The AD Equity Investment Company's ZC Real Estate Project

As one of the important pillar industries that drive GDP,the real estate industry has always played an important role in China's national economy and even became an important pillar of economic development in certain regions.However,since the end of 2016,the country began to cool down the overheated real estate industry:the Central Economic Work Conference first proposed that "the house is used for housing,not for speculation".After that relevant departments had successively introduced stricter regulation and control policies for real estate industry.Under the circumstances that the CBRC strengthened the constraint of credit scale,China's major commercial banks began to accelerate the pace of real estate credit adjustment which caused the real estate industry has a tight source of funds.Under the current situation,equity financing is gradually entering the real estate industry and continues to expand its share due to its low financial risk and low financing costs.Meanwhile thanks to the strong financial advantage,these equity investment companies have become the new favorite of the real estate industry,which are easy to form a win-win situation with real estate development companies.In the special period that slow down the pace and improve the quality of development of the real estate industry,the equity investment cooperation model has ushered in the opportunity of development and growth,but it also faces enormous challenges.The global economic situation and national control policies are changing rapidly.Especially since 2016,the real estate market had entered a new normal of slow growth rate,high market saturation,which means the industry profits kept declining.Therefore,it is of great theoretical and practical significance to study how the equity investment company can identify and control the investment risk in the whole process of investment decision-making,so as to obtain the expected income on real estate investment.The study is not only conducive to protecting the investment income of the company's own funds,but also conducive to the healthy growth of the corporation in the future,and meanwhile is very competitive to maintain the stability of the real estate financial market and even the real estate industry.What's more,from a macro perspective,it also complies with the national deployment requirements of adhering to the stable development of the real estate market.The research on risk management of domestic real estate projects is mainly based on real estate development enterprises.At the same time the research on the risk management of real estate equity investment is mainly based on real estate investment trust(REITs)funds and private equity(PE)investment funds.While relatively little research on investment risk management of real estate projects of equity investment companies.This paper takes the equity investment company's perspective,selects a representative equity investment company as an example to deeply analyzes the investment risk management framework of equity investment real estate projects,studies the risk management strategy from the whole process of Equity investment,and demonstrates the research with actual projects.Firstly,The article outlines the background and importance,and abstracts how to conduct the research,and clarifies the research focus.Then,combined the research objectives with the real estate investment,real estate investment risk and equity investment risk theory elaborately.Next,select a representative AD equity investment company to analyze the current investment management status and existing problems.The overall study is based on the perspective of equity investment companies.First of all,starting from the internal risk management,guided by the principle of risk management,supported by the organizational structure and guaranteed by the system construction.So as to control the investment risk of real estate projects through the whole process and builds a risk management framework for the company's equity investment.Second,starting from operability and practicality,the study traverses four key stages of Equity investment,that is,pre-investment preliminary review,investment decision-making,post-investment management,and investment exit.The key points of risk management and the corresponding control strategies are proposed for each of the four stages.Finally,taking ZC real estate project,which invested by AD company,as an example,to demonstrate analysis on investment risk management of equity investment real estate project proposed in this paper.The perspective of this paper is relatively new,and the research results are operability and guiding.This paper aims to help equity investment companies further improve risk management mechanisms and decision-making processes,control the investment risk of real estate projects effectively,guarantee the income on investment of the company's own funds and promote the sound development of the real estate industry under the new normal.