A Study On The Withdrawal Mechanism Of Private Equity Investment Funds In China

As a new means of financing, private equity fund has achieved certain development and is becoming increasingly important to Chinese economy. According to advanced experience abroad, it is certain that private equity fund will become a major means of financing in addition to bank loans and security markets.The operation process of private equity fund can be divided into four steps: fund raising, project selection, project operation and fund withdrawal. Because the last step will determine investors’benefits as well as the success or failure of the project invested, the withdrawal step is undoubtedly the most important one in the whole process.This article focuses on the withdrawal mechanism of private equity funds in China. The structure of the article is as follows:The first chapter is an introduction part. It illustrates the backgrounds for selecting this topic and the significance of this article, summarizes the research progress of domestic and foreign scholars, and states the structure of this article.In the second part, this paper first gives an introduction to the concept and forms of private equity funds, and analyzes the development process and status quo of them, showing that private equity funds are becoming an important form of modern finance.In the third part, this paper states the importance of the withdrawal step in the whole funds operation process, analyzes different kinds of withdrawal methods as well as the factors affecting the selection of those methods, and studies the practice of private equity fund withdrawal in China. Research finds that IPO and M&A are two most important withdrawal methods used in China. However, this article holds that M&A should become the mainstream for private equity fund withdrawal.The fourth chapter is case study. This paper selects two typical cases relating to IPO and M&A, the two most important withdrawal methods, hoping that it will shed some light on the selection of private equity fund withdrawal method.In the fifth part, this paper gives some relevant recommendations to the improvement of private equity fund withdrawal mechanism in view of the problems exiting in the withdrawal of private equity funds in China.