Research On The Investment And Exit Mechanisms Of PE In China

As an innovative financial product,Private Equity(PE)has been developing rapidly in China in recent years,becoming an absolutely necessary power in the Chinese capital market.The prosper of PE not only helps building China’s multilevel capital markets,but also enriches the means for the finance industry serving for the substantial economy.PE deserves more attention for it becoming more and more vital in our country’s economic construction.In recent years,as the global economy going down,the growing speed of Chinese economy slowing down,structural imbalance sticking out,the development of the economy entering a new normal and the revolution of China stepping into an abyssal region,the Chinese government takes the measures of calling for innovation and entrepreneurship,giving more aid to private enterprises and promoting the revolution of the supplying side.Under such a back ground,PE,which is an important way for feeding the real economy,has also been experiencing a profound change.The article aims at exploring and analyzing the characteristics of the PE industry by presenting the whole process of Beijing Oriental Goldstone’s investing on Shenzhen Huaxia Luster.The article is divided into three parts.The first part tells about the background of the case and the reason why choosing such a case,and it also gives a review of some viewpoints on the PE industry from the academic world.The second part is the principal part of the case,which presents the thorough flow path of the investment by showing an abundant of data,a detailed of interview between the portfolio managers and the CEO of Huaxia Luster,the messages collected from the due diligence,the valuation of Huaxia Luster and the process of making the decision of the investment.And in the third part,the author explores the changes occurring in the Chinese PE industry.In the last part,the author gives some advices on further more developing China’s PE industry such as promoting the professionalization of the employees,perfecting relevant laws and constructing a better investment and exit mechanism.