A Research On Risk Control Of A Private Equity Fund's Investment

The capital market has developed at the speed of light because of the honor of China's economy.At present,the financing needs of many small or medium-sized enterprises are expanding fast,and various financing channels have emerged.No wonder that the private equity investment industry has obtained good opportunities in this situation.Domestic PE investment behavior originated in the 1970 s and it is a new thing emerging in China's big economic environment.As a result,many private organizations in the business sector cannot form mature methodologies,coupled with imperfect industry policies and legal systems,which pose significant risks to companies in the early stages of the development.Currently,there is no shortage of research on the risk control of private equity funds in China's academia,but most of the articles only discuss and analyze the problems and solutions of domestic private equity investment projects theoretically,and they rarely talk about the actual cases in investment practice.This paper aims to analyze the advantages and disadvantages of A venture capital's risk control system in investment practice by analyzing the case of company A's investment in company B.It will not only propose a macro-level risk control framework,but also explain the improvement of each investment stage in depth.These steps aimed at offer opinions to enrich the private equity investment theory and improve the risk management operational process of the entire industry.Beginning from the theory of private equity funds and risk control,the article clarified the business processes and characteristics of developing,combines the unique risk management methodology in PE fund industry,and then analyzed the investment environment of the project and ways of risk control between A and B.Then the essay introduced a real case,including the establishment and development of A private equity fund,the growth profile of company B and so on.After that,it explained the private research content,investment plan and control analysis of the A private equity fund to the B company,and proposed improved risk control framework,pointed out the problems existing in the risk control process of A company in the pre-investment,mid-investment,and post-investment phases.Finally,the article puts forward specific improvement suggestions and some prospects.