Graphical analysis of M&A fund operation mode
How about setting up an M&A fund?
M&A funds mostly appear in mature markets, belonging to the _ end of private equity investment (PE), and also the mainstream model of PE in mature markets in Europe and America. Different from angel funds and growth funds, M&A funds mainly choose mature enterprises, while angel funds and growth funds mainly invest in entrepreneurial enterprises. The traditional M&A fund aims to gain the control of the target enterprise and seek the management right of the enterprise, while angel fund and growth fund exist in the form of equity participation and rarely participate in the daily operation and management of the enterprise.
It is usually good to set up an M&A fund. The difference between M&A fund and other types of investment is that venture capital mainly invests in entrepreneurial enterprises, and M&A fund chooses mature enterprises; Other private equity investments are not interested in corporate control, while M&A funds want to gain control of the target enterprise.
M&A Fund is a fund that focuses on M&A, the target enterprise. Its investment method is to acquire the control right of the target enterprise by acquiring the equity of the target enterprise, and then sell it after a certain period of restructuring and transformation.
What are the risks of M&A funds?
The first is M&A decision, that is, dare to buy. M&A must first have a clear goal, purpose and direction, and should not buy for the sake of buying, which is very dangerous.
Secondly, the transaction risk, to judge whether the enterprise is worth buying, whether it can be saved, if it goes bankrupt after the acquisition, then there is no need to buy. This is a test of M&A mode and technology and due diligence.
Finally, the management risk after merger and acquisition, many people suffer in this piece. Replacing the management of the merged enterprise is bound to die, and it is very important to arrange an incentive mechanism for it, which is also a test of technology.