PE Concept

Private equity is one of financing types. Private equity investors mainly provide the long-term venture capital for the traditional industry, with a larger scale, with good economic efficiency, non public companies.

Private equity fund usually owned by limited partner (LP), which comprises pension funds, insurance companies, development fund, government and private investors. The Fund is managed by the General Partner (GP).

Function of private equity

From the view of state's macro-economic, private equity fund brings about additional economic benefits. For example, the sales and employment growth rate with the support of private equity is 20% higher than the situation without private equity. Meanwhile, private equity will speed up economic growth and raise national income. Private equity has also led to the development of other related service industries, such as accountants’ firm, law firm, consulting firm and so on.

Private equity can bring additional value for the enterprises. Private equity effectively replaced the bank loan. As the company's private equity investors, PE investors has an obligation to help to build an advanced enterprise management mode so as to effectively improve operating efficiency and improve the quality of company operations.