Foreign Private Equity Funds Of The Institutional Economics Research

SMEs is a solid force in promoting China’s social development. However, difficulties in financing have been plagued with small and medium enterprises for a long time. While private equity investment fund is an innovative institutional arrangements to solve the difficulties in financing of SMEs.As the local private equity market of China is in the initial stage, in its true sense, the emergence and development of Chinese local private equity fund has only more than ten years history, which is too weak to bear the burden of the development of Chinese capital market. While foreign private equity funds have very positive meaning for China’s capital market development because of their abundant capital, rich experience, advanced management, huge investment. In spite of some progress of China’s local private equity funds, foreign private equity funds still play an indispensable role. Thus, the guidance and supervision work of foreign private equity funds is worthy of research.In the last more than ten years, more and more industries have been open to foreign private equity funds, the scope of the establishment of investment institutions for foreign private equity funds have been extended to some extent. Some legal and regulatory impediments restricting their development no longer exists. However, generally speaking, current legislative situation for foreign private equity funds still has many problems. For instance, legal lack of unity, exit regulations lag in the establishment and exit procedure for foreign private equity funds. Exit is the ultimate goal of foreign private equity funds, exit regulations lag directly cause a blockage for foreign private to enter the Chinese market.This paper, on the basis of current situation of foreign private equity funds in China, through in-depth analysis of relative institutional environment, exit mechanism and market, and classification of the defects and problems of laws and regulations for foreign private equity funds, makes constructive suggestions on how to reform and strengthen supervision for foreign private equity funds so as to facilitate the development of China’s local private equity funds and China’s capital market.