Financial Risk Control Of Private Equity In Global Mergers And Acquisitions

In the later 20th century, with the large-scale open of markets and the rapid growth of international capital, countries also have more financing channels for further innovation. Private equity funds are becoming the third channel for enterprises' financing, the other popular financing channels are bank loans and IPO. In china, more and more overseas private equity funds enter and participate in a variety of mergers and acquisitions. The local private equity funds, which is late start and weak strength, has also been rapid developed under this driven environment. In recent years, private equity investment has gradually displaced green-field investment as the main part of the international direct investment, especially in China. Therefore, we need know the form of private equity, its risk management, business reengineering, and exit mode, etc, which is helpful for us to understand our local private equity fund market, and the risk management after introducing private equity funds. That's why we need to conduct in-depth study of private equity funds.This paper gives a clear introduction to the process of how private equity funds participate in cross-border M&A, then takes a deep analysis to the case of the Newbridge Capital's acquisition in Shenzhen Development Bank. Comparing with both Chinese and foreign management concepts, business philosophy, operational efficiency and risk control, in order to prove that Newbridge Capital did enhance the development of Shenzhen Development Bank. And give advice to our enterprises when face global challenges.This paper studies the form of case studies, starting with the theory of interpretation of private equity participation in a series of cross-border M & A process and risk control, and then acquisition of Shenzhen Development Bank to Newbridge Capital in this case the main line, detailed descriptions of the Newbridge Capital and Shenzhen Development hand and the withdrawal process. Last infiltration case itself, with new developments in the White bridge after a series of initiatives, compared to both Chinese and foreign management concepts, business philosophy, operational efficiency, risk control, to prove that White did Newbridge Capital to enhance the development of deep enterprise value. By comparing the differences between this management to explore the introduction of foreign governments and private equity companies should pay attention to the problem and how to improve themselves to face global challenges. To build the framework, this article is divided into five chapters.Chapterâ… :Introduction. Brief introduction to the background information of private equity in international marke, get the framework of this research.Chapterâ…¡:Literature Review. Details related to the theory of cross-border M&A, cross-border mergers and acquisitions have the motivation, and promote the factors related to post-merger integration and acquisition of results.Chapterâ…¢:The operational characteristics of cross-border mergers and acquisitions. This section describes in detail the operational characteristics of cross-border mergers and acquisitions, the difference of their cross-border direct investment and other related differences in simultaneous analysis of cross-border mergers and acquisitions in private equity investment strategy.Chapterâ…£:Private equity participation in the core motivation for cross-border mergers and acquisitions. In this section, would be a definition of private fund, we will discuss private equity investment market taken the borders opened up the main motive, and the participation of private equity funds compared with the traditional cross-border investment in the direct cross-border investment any different.Chapterâ…¤:Private equity participation in the risk of cross-border merger control. In this section, we will focus on analysis of private equity funds to participate in cross-border M & A motives, trends, characteristics and operation of private equity funds in mergers and acquisitions in the risk control, operations and exit mechanisms.Finally, in chapterâ…¥andâ…¦, will a case research of Newbridge Capital's participation in Shenzhen Development Bank. Their operating system,management, exit model, and relevant policy recommendations will be reflected in this part.This paper uses case study analysis and comparison of a combination of methods, adhere to the basis of the actual situation and the feasibility, from the perspective of internal control, the concept of private fund, characteristics, development status and problems, and many other analysis Comparative analysis of foreign funds in capital operation, while the introduction of a foreign private equity funds of enterprises for the need and importance of strategic investment.Contribution of this article:First, the current private equity fund domestic research articles less risk control, no system is also introduced in private equity M & A operations and risk control literature. This reference to the parties to the literature, to study overseas private equity funds in the operations of foreign markets, but also our country has undergone a detailed analysis of the case, I believe will give the relevant enterprises to provide some reference value.Second, the domestic literature, mainly focused on private equity funds own research, did not change the environment to sophisticated international perspective of the operating characteristics of private equity funds, this paper, case study research methods, and easy analysis adds to this aspect.of defects.The limitations of this article:First, because of the limited knowledge, the conclusion may be not perfect. Secondly, the data selected in the paper is for the period finishing with 2010, the changing macroeconomic maybe lead the conclusion a little far from the reality of the situation.Finally, private equity funds involved in global mergers and acquisitions will bring many impacts to the host country, but in this paper, we only research in a economic vision.