Study on Exit Mechanism for Private Equity Investment

Abstract

As a new type of investment and financing method, the private equity investment saw rapid development in China. The private equity investment can not only provide financial support for enterprises, but also can improve the corporate governance structure and management level depending on the advantage of financial management and advisory experts. However, the fundamental purpose of private equity investment institutions is to obtain high income, and whether the high income can be achieved depends on the success of capital withdrawal. Capital withdrawal, i.e. exit is an important part of normal operation for private equity investment. This paper will build an exit mechanism for private equity investment through analysis of the selection of the three factors, which are ways to exit, timing of exit and degree of exit.
Key words: Private equity investment; Way to exit; Timing of exit; Degree of exit