On January 18, Beijing Fund Town Institute and Beijing Equity Trading Center jointly released the Research Report on the Exit of China's Private Equity (Venture Capital) Funds (hereinafter referred to as the "Research Report") with Global Law Office, Han Kun Law Offices, Jun He Law Offices, and Deloitte China, in order to help broaden the exit channels of private equity venture capital funds and promote the high-quality development of the industry.

In recent years, with the advancement and implementation of the comprehensive registration-based system reform in the capital market, the exit environment for private equity funds and venture capital funds has been improved continuously. When compared with the huge scale of 10 trillion-level assets in the industry, however, the overall scale of the exit side remains insufficient, and the "difficulty in exiting" is troubling and restricting the development of the industry.

"How to successfully exit from equity investment and obtain reasonable investment return is the difficulty and pain point faced by investors and private fund managers, and also the key point and breakthrough for the high-quality development of the industry." Li Jian, Member of the Expert Committee of the Beijing Fund Town Institute, and Professor and Doctoral Supervisor from the School of Finance, Central University of Finance and Economics, said in his speech at the press conference that "to support the growth of venture capital and equity investment" was put forward at the Central Economic Working Conference for the first time, which fully affirmed the positive role and contribution of venture capital and equity investment in supporting the real economy and promoting scientific and technological innovation. In such a context, it is of great practical significance to study and discuss the exit of equity venture capital funds and release and share relevant research results.

As He Yibo, Deputy General Manager of the Beijing Equity Trading Center, said, Beijing Equity Trading Center, the first pilot institution for share transfer of private equity investment and venture capital in China, has initially developed the corresponding infrastructure service platform in the past three years to facilitate the standardized, orderly and effective exit of fund shares and invested project equity. Obviously, it is time for Beijing Equity Trading Center to hold this event and release relevant research results together with Beijing Fund Town. Hopefully, this report will be beneficial to the development of practitioners in the industry, and meanwhile they will further exert their platform functions to promote the ecological construction of the private equity secondary market, and work with all parties to build an efficient and compliant exit "highway".

It is understood that in the Research Report, the current situation and problems of China's private equity and venture capital fund exit have been comprehensively sorted out from three perspectives of legal compliance, tax treatment and investor protection to analyze the pain points and difficulties in practice, look forward to the development of new fund exit and liquidation methods such as S transaction and in-kind distribution. Meanwhile, suggestions are put forward in the Research Report for improving the system and tax and other related policies, which will help private equity and venture capital fund managers and investors clarify exit channels, alleviate the difficulties and pain points in practical processing, choose the optimal exit channel according to their own conditions, achieve better investment exit arrangements, and protect the rights and interests of investors. Besides, it is also helpful to establish and improve the exit mechanism and institutional arrangement of equity venture capital funds, broaden the exit channels, give better play to the leading role of innovative capital, accelerate the virtuous circle of "science and technology-industry-finance", and promote the high-quality development of economy.

As an innovative think tank initiated and established by Beijing Fund Town, Beijing Fund Town Institute has cooperated with the Central University of Finance and Economics, China University of Political Science and Law and other universities, as well as well-known law firms, accounting firms and other professional service institutions and leading investment institutions to jointly carry out relevant research in the financial field. So far, a range of research results have been released, such as Factor 365-From Traditional Factors to Machine Learning, Quantitative Investment in China, The Best Practices of Private Fund Governance in China, and The Manual on Protection of Private Fund Investors.

The report will be released simultaneously on the Investor Education Center APP (Public Beta) to share this achievement more widely, according to the relevant person in charge of the Beijing Fund Town Institute. In the future, Beijing Fund Town Institute will continuously focus on and deepen the research for the private equity venture capital industry, pool professional think tanks, participate in building a national investor education center, and establish a digital investor education service platform, "Investor Education Center APP", to promote the high-quality development of the private equity fund industry.