Research On Legal Regulation Of Merger Fund

According to the statistics, China’s M&A market has completed406M&A dealsin the first half of2013, of which383cases have disclosed the transaction amount,and the total amount involved amounts to$40.342billion, with year-on-year growthof24percent and a link-relative growth of121%. The first half of2013thus showsthe highest trading volume on a six-month basis. M&A market’ sharp growth hasgreatly accelerated the development of Buyout Funds in China.Buyout fund is the mainstream form of Private Equity (PE) in the maturedmarket such as U.S. and the Europe. As the share of China’s M&A market in theglobal M&A market keeps increasing, international PE giants have entered China’sM&A market. However, China’s buyout funds are falling behind these internationalpioneers either in aspect of the funds’ total number or the funds’ scale. After a fewyear’s exploration, buyout funds in China has reached a certain scale, which is in linewith the china’s development pattern, and some typical M&A cases appear. But theproblem cannot be ignored is the omission of corresponding laws, regulations ormanagement practices and the fussy supervision frame of the Chinese government.This makes the regulatory issue China’s buyout funds quite prominent.In this paper, the author tries to address the problems of China’s buyout funds,combining the operating mechanism of buyout funds with the experience of foreignbuyout funds. Through the analysis of fund-raising, foreign investment and regulatorymechanism of China’s buyout funds, the author tries to make suggestions to thedevelopment of China’s buyout fund. The main contents will be elaborated as follows:The first chapter elaborated the concept of buyout funds and buyout funds as animportant branch of private equity funds. A comparative analysis of the concept,features, and distinguishing related concepts is made to help people grasp a morecomprehensive understanding of buyout fund.The second chapter analyzes the background and development of foreign buyoutfunds, and compares them with those in China. It tries to get a more intuitiveunderstanding of the development of China’s buyout funds in terms of its externalenvironment. Development patterns of buyout funds are also analyzed. The authorattempts to pave the way for the regulations of buyout funds’ law.The third chapter analyzes the legal environment of buyout funds in China, and the history of relevant laws, pointing out the lack of specific legal provisions forbuyout funds. The fourth chapter describes the specific legal regulation on buyoutfunds, elaborating on the fund-raising process, foreign investment, supervision andother aspects, and made considerable recommendations on the development ofChina’s buyout funds.