Research On Risk Management Of Private Equity Fund Companies

The private equity investment industry around the world has come to a new development stage and become the important power in international financial market.In recent years,the private equity investment fund industry in China has emerged and flourished,becoming the significant and vital part of the financial market of China as well as the hot issue in the financial innovation nowadays.However,China's private equity investment starts quite late and is in the preliminary development stage.Many problems and development obstacles occurred in the real operation process of financing,project selection,follow-up management and exit and gaining profit largely restrict the development of private equity investment in China.The private equity investment is a highly creative economic activity and its whole process including conception,negotiation,signing and exit requires the involvement of many links that are possibly to fail.In reality,the whole process is faced with great risks.At present,most of the private equity firms are small and medium-sized private enterprises.For them,the profit maximization is the industrial target and their risk control systems are far less comprehensive than those of the state-owned or large-sized companies.Therefore,the study on the way to avoid the risks in the private equity investment mode,realize the win-win of investors and financing enterprises and enhance the risk control of enterprises in private equity investment mode is of great significance.The paper has summarized and analyzed the relevant international and domestic research achievements and utilized the principal-agent theory,risk management theory and information asymmetry theory as the theoretical foundation as well as literature research and case analysis as the research methods,in order to analyze the cases of four stages of risk control system and execution condition for the private equity investment operation of A Company from the perspective of risk control process.The paper evaluated and analyzed the risk control problems in the four stages of financing,investment,management and exit of A Company,combined with the four ways of risk control to improve its risk control proficiency and internal control system,and established the talents guarantee system to reduce its investment risks.All the measures promoted the long-term development,improved the economic efficiency and enhanced the competitiveness of the company to maximize its enterprise value.