Private Equity (P

ivateEquity (PE) refers to a financing method to raise funds from unlisted equity or non-publicly traded equity issued by listed companies. After the private equity investment is obtained, the raised funds can be used to conduct research and development of new products or technologies, mergers and acquisitions, and improve the company's debt capacity.

Private equity financing is not a public offering of shares, but is aimed at specific investors, and can be achieved through capital increase and share expansion, equity transfer, etc. The advantages of private equity financing include the following, as shown in Table 2-3.

Based on the above advantages, private equity financing has received strong support from the Chinese government. In recent years, the Chinese government has issued a series of policies to promote the sustainable and stable development of private equity financing, such as the Notice on the Division of Responsibilities for the Management of Private Equity Funds and the Interim Regulations on the Administration of Private Investment Funds (Draft for Comments). With the efforts of the China Securities Regulatory Commission and the Asset Management Association of China, the private equity financing industry has established a "7+2" self-discipline system, including 7 self-discipline management measures and 2 guidelines, of which 7 self-discipline management measures include fundraising measures, registration and filing measures, information disclosure measures, investment consulting business management measures, custody business management measures, outsourcing service management measures, and qualification management measures; The two guidelines include the guidelines on internal controls and the guidelines on fund contracts.

Promoting the development of private equity financing cannot be driven by policies alone, and the market also plays an irreplaceable role. Taking the property rights trading market as an example, through a standardized and orderly property rights trading market, investors can find suitable enterprises for investment, protect investment returns, and reduce investment risks.

Tianjin, Guangzhou, Jiangxi and other regions are actively promoting the development of private equity financing, establishing and improving the property rights trading market, and using the market's resource integration capabilities to provide financing services for the majority of non-listed enterprises, especially small and medium-sized enterprises with scarce resources.

Taking Tianjin Equity Exchange as an example, Tianjin Equity Exchange was established in September 2008 to create an innovative financing model based on commercial credit based on "small, multiple, fast and low-cost" for the majority of small and medium-sized enterprises and innovative enterprises, which has received positive responses from the majority of small and medium-sized enterprises. Not only that, the governments of Shandong, Hunan, Shanxi, Zhejiang, Jiangsu, Fujian, Hebei, Guangdong and other places have introduced favorable policies to encourage local companies to list on the Tianjin Equity Exchange.

As a window for China's opening up to the outside world, private equity financing in Guangzhou appeared earlier. As early as 1999, Guangzhou established the Guangzhou property rights trading market, and the transaction projects covered many fields such as automobiles, chemicals, retail, and high-tech.

On the whole, with the continuous development and improvement of the property rights trading market, more and more small and medium-sized enterprises have successfully financed through the property rights trading market, and their massive information resources can meet the differentiated needs of financing enterprises that choose different financing methods. At the same time, with the characteristics of transparency, openness and standardization, the property rights trading market can escort the entry and exit of investors' funds and effectively protect their legitimate rights and interests.