Research on the Exit Routes of Chinese Private Equity Funds

  •  Jingjing Yang    
  •  Lesha Zhang    


Up to the present, private equity (PE) is a relatively new financial instrument in China. Due to the rapid growth of Chinese economy, a great number of domestic and overseas capitals had participated in PE business in recent years. PE usually claims back the funds from the investment after earning satisfactory profits. The primary exit routes for PE include IPO, write-offs, Management Buyout (MBO), repayment of shares or loans and sold to other venture capitals or financial institutions. Among these strategies, IPO has always been the dominant exit routes for PE. Nonetheless, PE faced a few obstacles withdraw the funds from investment through IPO in China lately, such as the bad performance of domestic stock market and the tight monetary policy. Accordingly, PE should consider further the effectiveness of these routes when reclaiming the funds from the investee companies.

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