What's the difference between M&A fund and private equity fund? Exit mode of M&A fund
What does industrial merger and acquisition fund mean?
Xingye M&A Fund is a fund focusing on the target enterprise M&A.. Its investment method is to acquire the control right of the target enterprise by acquiring the equity of the target enterprise, and then carry out certain restructuring and transformation, and then sell it after holding it for a certain period of time.
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.
Characteristics of industrial M&A fund;
1. In terms of fund raising, it is mainly raised by a few institutional investors or individuals by private placement, and its sales and redemption are carried out by the fund manager through private consultation with investors. In addition, the investment method is also carried out in the form of private placement, which rarely involves the operation of the open market and generally does not need to disclose the details of the transaction.
2. More equity investment is adopted, and debt investment is rarely involved. Therefore, PE investment institutions enjoy certain voting rights in the decision-making management of the invested enterprises. Reflected in investment tools.
3. Generally investing in private companies, that is, unlisted companies, and rarely investing in publicly issued companies, will not involve the obligation of tender offer.
4. It is more inclined to a molding enterprise that has formed a certain scale and generated stable cash flow, which is obviously different from VC.
5. The investment period is long, generally reaching 3 to 5 years or longer, which belongs to medium and long-term investment.
6. The liquidity is poor, and there is no ready-made market for the transferor of a non-listed company to directly reach a deal with the buyer.
7. There are many sources of funds, such as wealthy individuals, venture funds, leveraged M&A funds, strategic investors, pension funds and insurance companies.
8.PE investment institutions mostly adopt limited partnership system, which has good investment management efficiency and avoids the disadvantages of repeated taxation.
9. Investment exit channels are diversified, including initial public offering, transaction sale, merger and acquisition, and buyback by the management of the target company.
Three modes of M&A fund:
The first mode is to set up M&A fund with securities firms. In the second half of 20 14, the establishment of M&A funds by brokers became a craze. For example, Huatai Securities established Huatai Ruilian Fund Management Co., Ltd. through Huatai Zijin, a wholly-owned subsidiary, and then Huatai Ruilian initiated the establishment of Beijing Huatai Ruilian M&A Fund Center, which attracted many listed companies such as Aier Ophthalmology, Blue Cursor and Palm Fun Technology.
The second mode is to set up M&A fund jointly with PE. For example, in February 20 14, Kangdexin cooperated with controlling shareholders Kant Investment and Senyu Investment to set up investment funds for new materials industries such as new energy electric vehicles and intelligence. Other examples include Zhongheng Group, Kunyao Group and Jianmin Group.
The third mode is to set up M&A fund jointly with the banking industry. For example, in June of 20 15, Oriental Garden established a strategic cooperative relationship with Minsheng Bank to assist the company in formulating a financial plan for the integration and development of industrial chain mergers and acquisitions. The two sides will set up an M&A fund to acquire and cultivate the M&A targets of the upstream and downstream industrial chains selected by Oriental Garden.