Research On Withdrawal Way Of Private Equity Investment In Emerging Industry Equity Fund Co.,Ltd

In recent years, with the rapid development of Chinese economy, various typesof private equity funds develop rapidly across the country. In promoting nationaleconomic growth, improving the capital markets, especially emerging industries andpromoting technological innovation and technological enterprises, PE plays animportant role in solveing financing difficulties of SMEs. Local governments haveset up state-owned background of venture capital funds for inducting social capital toboost local economic development.Emerging Industry Equity Fund Co.,Ltd is set up in this background andgradually developed. Since its establishment, because of guidance and support ofgovernment funds, it has been actively playing the role in providing financialsupport for the majority of high-tech small and medium private enterprises inChangchun, so it greatly ease the financing problems of enterprises and it play a vitalrole in promoting Changchun economy and new industries.Equity investment business of Emerging Industry Equity Fund company includefund-raising, project investment, the investment management and project quit.Where the withdrawal is necessary for the equity investment business realizinginvestment gains, and plays an important role. Successful withdrawal can makeinvestment fund company realize investment gains and can reinveste capitalappreciation of the projects to satisfy more funding needs of the enterprise. Becauseof its local state-owned background Emerging Industry Equity Fund Companyfaces a variety of problems in the selection and implementation of withdrawal. Onthe one hand due to geographical restrictions, invested companies must located in Changchun, but its economic and financial environment is bachward, and thisadversely affect the company’s equity investment business. It is difficulty For thewithdrawal ways of IPO and acquisition; on the other hand as state-ownedenterprises, when the invested firm has IPO, its shares will be partly or totallytransfered to Social Insurance Fund as state-owned shares, and it will suffer a majorloss. When you exit by the equity transfer. You will face more complicated processes,since the operation is not so flexible enough and it will lose exit opportunities.In this dessertation, it is a case study about private equity investment fundcompany’s exit mode. First introduced are the IPO, M&A, secondary sale ofexisting equity repurchases, then we discussed the problems of Equity Fundcompanies may face in the implementation of the exit modes. From the statebackground, investment areas, multiple angles foreign cooperation and investmentexit, we analyze the causes of problems that Equity Fund may face at exit. Finally,we propose four solutions: optimizing for state-owned equity investments, equitymarket to expand outside the region, and actively carring out internationalcooperation, the overall investment exit planning. The ultimate aim is to havesignificance in development of private equity investment institutions with similarbackground to Emerging Industry Equity Fund with local state-owned assets toprovide reference and help in exit mode selection.