Research On The Exit Mechanism Of Equity Investment Of Guangzhou Industrial Investment Fund Management Co.,LTD

In recent years,with the rapid development of Chinese economy,various types of private equity funds(also called “PE”)develop rapidly across the country.In promoting national economic growth,improving the capital markets,especially emerging the local industries and promoting technological innovation and technological enterprises,PE plays an important role in solving financing difficulties of SMEs.Local governments also have set up state-owned background of equity funds for inducting social capital to boost local economic development.Guangzhou Industrial Investment Fund Management Co.,Ltd is set up in this background and gradually developed.Since its establishment,because of guidance and support of government funds,it has been actively playing the role in providing financial support for the majority of high-tech small and medium private enterprises in Guangzhou,so it greatly ease the financing problems of enterprises and it play a vital role in promoting Guangzhou's economy and new industries.Equity investment business of Guangzhou Industrial Investment Fund Management Company include fund-raising,project investment,the investment management and project quit.Where the withdrawal is necessary for the equity investment business realizing investment gains,and plays an important role.Successful exit mechanism can make investment fund company realize investment gains and can reinvest capital appreciation of the projects to satisfy more funding needs of the enterprise.Because of its local state-owned background Guangzhou Industrial Investment Fund Management Company faces a variety of problems in the selection and implementation of exit.On the one hand due to geographical restrictions,invested companies must locate in Guangzhou,but its economic and financial environment is backward,and this adversely affects the company's equity investment business.It is difficulty for the exit mechanism of IPO and acquisition;on the other hand as state-owned enterprises,when the invested firm has IPO,its shares will be partly or totally transferred to Social Insurance Fund as state-owned shares,and it will suffer a major loss.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 dissertation,it is a case study about private equity investment fund company's exit mode.First introduced are the IPO,M&A,secondary sale of existing equity repurchases,then we discussed the problems of Equity Fund companies may face in the implementation of the exit modes.From the state background,investment areas,multiple angles foreign cooperation and investment exit,we analyze the causes of problems that Equity Fund may face at exit.Finally,we propose four solutions: optimizing for state-owned equity investments,equity market to expand outside the region,and actively caring out international cooperation,the overall investment exit planning.The ultimate aim is to have significance in development of private equity investment institutions with similar background to Guangzhou Industrial Investment Fund with local state-owned assets to provide reference and help in exit mechanism selection.