Exit Mechanism Legal Research Of Private Equity Funds

Named for their orientation of raise way and specific of investment object, private equity funds are a product of financial innovation and industrial innovation. They broaden the enterprises’ financing channel and provide high-yield investment channel. In recent years, along with the deepening of economic mercerization, domestic and foreign private equity funds form the dance. According to statistics from Qing Te research center, private equity funds raised in2011to invest in China’s mainland are a total of235in which221disclosed raised the amount of S38.858billion.In the operation of private equity funds, exit is the most important section. From a certain perspective, the exit of private equity funds decides the success or failure of its investment in the end.In various channel of its exit, IPO exit is the most widely used. How to improve the IPO system and innovated constantly more channels of the exit of private equity investment funds at the same time are the essential points of the discussion in this paper.This article is divided into four parts to discuss.The first part analyzes private equity funds and the exit of private equity funds. System connotation and operation pattern of private equity funds are the starting point of the exit mechanism discussed in the paper.The second part introduces the IPO system in China’s relevant laws and regulations, and analyzes emphatically barriers caused by the system to IPO exit of private equity funds. Lock-up period regulations determine expected earnings and ROI of private equity fund investors. The longer Lock-up period provisions will naturally affect the investors through IPO exit.The third part introduces the overseas IPO system of laws and regulations. Many enterprises in China choose to list in overseas, and why is this? It will be answered by knowing the foreign laws and regulations. Perfect legal system and industry regulatory system of overseas market are benefit for enterprises to achieve IPO.The last part,from macro perspectives, in accordance with the practical needs of the development of China’s private equity funds, combined with the analyses of the second and third part, puts forward to good suggestions on perfect laws and regulations of IPO and proposes the new exit channels of private equity funds are innovated.