Adapted from July 9 published by the “Financial” magazine
Compiler: Fund China

Worse for China, the situation facing the PE is more complicated. On one hand, state-owned and privately owned enterprises in corporate governance and capital structure have short board, and capital market efficiency is low, the PE for the long-term development of the stage. the other hand, PE as a form of financial institutions, their own needs, a sound legal system and cultural capital of the support, investors can be established between managers and efficient mechanism for the balance.

Therefore, ready to be launched homemade PE, opportunities and risks associated with Hang Seng. Chief hands in the future growth of China-made PE how to gradually fade away? How market forces play a better role? Will be the people of China PE has long been concerned about the future course of the core topic.

In the 21st century in the global market, has created a record of a huge merger, PE (Private Equity Fund) from all levels of penetration into the Chinese market, becoming an increasingly important force.

July 9 published by the “Financial” magazine cover reported launch “PE China Dream” China has become the focus of the current PE industry key issues, entry and exit : 10 billion government-driven PE into how the development of Paradox; A leading shares from how to open the road.

“Financial” report, in mid-June, the Research Center of the China Securities Regulatory Commission, under the auspices of foreign PE 18 gathered Wuyishan, A shares began to seek the withdrawal of the road. Once open up the joints, means that foreign PE is not required bypass mode red chips may be realized investment projects, This will also domestic capital market structure, acquisition reform and privatization trends have a major impact.

From the road is also promoting the road in the A-share market profits would have to set up in China yuan fund demand. Following the Bohai Industry Investment Fund, by the end of May, the State Development and Reform Commission to the State Council declared the four pilot Industry Investment Fund, more scale in more than 10 billion yuan of funds. However, the pilot still seriously weighing mode, the latest indications are that the final outcome is still very variable. In fact, this has also led to a market-oriented ways to promote the development of domestic PE reflection.

“Financial,” reported that on the international market and PE industry flourishing, With no matter how successful has been the investment case, the PE industry as a whole. still in the system will change in the 200 unchanged cocoon around.

Worse for China, the situation facing the PE is more complicated. On one hand, state-owned and privately owned enterprises in corporate governance and capital structure have short board, and capital market efficiency is low, the PE for the long-term development of the stage. the other hand, PE as a form of financial institutions, their own needs, a sound legal system and cultural capital of the support, investors can be established between managers and efficient mechanism for the balance. Therefore, ready to be launched homemade PE, opportunities and risks associated with Hang Seng. Chief hands in the future growth of China-made PE how to gradually fade away? How market forces play a better role? Will be the people of China PE has long been concerned about the future course of the core topic.

In this special group to the end. two representative figures of the industry — Legend Holdings and Hong-yi, chairman of investment and Ding Hui Liu Chuanzhi, chairman of investment Tunchangzhi — right “Financial” Fine Chinese PE were facing the system constraints and business opportunities.

Liu Chuanzhi, compared with the international market, China’s market environment is very suitable for some of the features of PE development. First, China’s traditional industries have much room for growth, and therefore the PE investment returns than investment risk is higher. Foreign limited growth in traditional industries, the investment risk is the risk industries, but China’s traditional industries such as building materials, clothing, food and beverages, and other fields, on the one hand, in addition to screening industry risks, other developments soon, very suitable for PE investment; Secondly, Due to the lack of resources of private enterprises, PE is equivalent to the entry of the “drip” Once it enters the enterprise tends to bring about a qualitative change; Third, the property rights of state-owned enterprises reform and incentive mechanisms. PE provides a good tool. The property right reform of the past or management buyouts, is prone to the loss of state assets restricted PE is the emergence of a market-oriented price for the enterprise and management pricing, be regulated to promote the reform of state-owned enterprises.

Wu Shangzhi, PE and capital from the market perspective, PE is not only an investment in the market withdrawal mechanism, the PE will become an active capital market participants. He believed that greater changes, first with China’s capital market further convergence, Second, the renminbi funds and the creation of scale. Now the industry to withdraw from the funds are “two outer”, it can not always be on the outside.

Copyright Fund China 2008.

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