Guangzhou H Company Private Equity Fund Of Funds Creation And Investment Strategy Research

As the global economy develops gradually from commodity economy towards the technology-innovative economy which is driven by capital,private equity investment has been considered as one of the most influential bodies in capital markets with a non-negligible influence on promoting economy development.After the explosive development stage during 2015-2016,China’s private equity investment sector has become the world’s second largest private equity investment market with the AUM size managed by its private equity funds reaching 6 trillion CNY by H1,2016.According to the development of equity investment in USA,the occurrence of private equity investment assisted the real economy and boosted the rapid development of innovative start-ups,when private equity fund of funds(hereafter shortly referred as“PE FOFs”)are the outcome of development of private equity fund sector in certain stage.This paper will firstly summarize the development and problems of China’s PE FOFs sector,and comb rather comprehensively the current business situation with a SWOT analysis on the company’s development of PE FOFs,and the future development opportunities of Guangzhou H Company.With combinations of relative theories and work experience upon the previous researching achievements on PE FOFs,this paper will adopt scientific and normalized research techniques including normative research,comparative study,logical deduction,and case study to investigate how a company can develop its PE FOFs based on the current circumstance and make set-up practice as well as investment strategy for this business.The foundation of PE FOFs would consider the aspects including overall strategic planning,organization form selection and model design,founding partner hunting,operation procedure forming,and typical terms setting,etc.The formulation of investment strategy of H Company in Guangzhou will include asset allocation strategy,sub-fund manager selection strategy,fund-raising strategy,post-investment strategy and exit strategy.Corresponding suggestion for improvement will be proposed on the basis of the feedback and comments occurred in the practice.In the last part there comes a summary of this paper,which considers that H Company in Guangzhou has a bright prospect in developing PE FOFs,whose professional operation of PE FOFs meets the industrial trend.The international operation of PE FOFs brings opportunities to H Company as the investors in PE FOFs will expand and the marketization of PE FOFs will be the significant way out for private capitals.Though there are difficulties and challenges for PE FOFs,PE FOFs will bring a more benign development to private equity investment sector and enhance the progress of “the survival of the fittest”.