Research On The Construction Of Risk Management System In PE

After the introduction,expansion and depression,private equity investmentin China gradually become mature.As one of the new power of China's economy development,PE have become an important link between capital market and enterprises.Based on theories of venture capital and risk management,this paper makescomprehensive analyses of the risk PE institutions face and how they deal with them.It is found that there are some problems in risk management in PE institutions:first,they are lack of dynamic overall risk management systems;second,the due diligence procedures are done carelessly;third,risk monitoring and communication mechanism are ineffective;fourth,risk response are with low efficiency.Aiming at the problems found in the case,this paper puts forward some countermeasures.Firstly,PE institutions should establish improved risk management systems throughoutall the stages of investment,combine qualitative and quantitative analysis methods,achieve regulation timely and control risk effectively with smooth communication.Furthermore,risk management culture must be formed to set up risk awareness in the organizations.Finally,PE institutions shouldbuild flexible exit strategies.Based on the related theories,this paper analyzes the risk in private equity investment during ex ante investigation,ex post governance and exit and puts forward corresponding solutions.In addition,this article designs a set of enterprise-risk management system to provide reference for China's private equity institutions.