The so-called buyout fund (M&A fund) is one of the investment operation modes of PE funds. After gaining control of the company, these M&A funds reform and reorganize the company, enhance its operational capacity, increase its value, and then sell it for profit. LBO (leveraged buy-out) is the main way to improve the profitability of buy-out funds, and maximize the return on equity investment through highly leveraged buy-out. Therefore, a real M&A fund should meet the following conditions: 1, gain control of the enterprise, and 2, participate in the operation of the enterprise. According to this standard, there are few real buy-out funds in China, and most PE funds buy minority shares of the target company as financial investors, that is, holding shares for mergers and acquisitions.
When it comes to its risks, it can be said that it is congenital deficiency, and it has not been replenished the day after tomorrow. The development of real M&A funds in China can be said to be congenital deficiency, and it does not have the soil for its growth. The main reason is: 1. China's bond market is underdeveloped and cannot effectively support leveraged buyouts, which affects the yield of PE investment; 2. China has no professional manager class and perfect corporate governance culture, so it is difficult to carry out professional management and integration after purchasing the controlling stake, thus improving the company's valuation; 3. The exit channel is not smooth-the efficiency of property right transfer is low, which leads to strong uncertainty of the exit cycle and affects the return on investment.
The question is answered by Chen Niuniu's studio, hoping to help you.