Is there an optimum exit strategy for private equity firms in China?

Abstract

Private equity (PE) is a form of financing that allows a company with greater potential to buy equity at a lower price and then sell the stock at a higher price through the company's management and operations. Private equity investment is of great value to economic growth and is an important driving force for the transformation and upgrading of the real economy. Especially when there is a bottleneck in development, those enterprises that receive private investment tend to outperform similar enterprises. The operating mechanism of PE consists of four steps: fundraising, project selection, investment management, and investment exit. The most important part of private equity investment is “exit”. This article will focus on the current state of private equity investment development in China and find the best exit strategy for Chinese private equity firms.