Private Equity Investment Research On The Impact Of Corporate Governance

In recent years, private equity has become an emerging force in global capital markets and has become an important part of the multi-level capital marketconstruction. As the market competition mechanism is not perfect, there are still many imperfections in China's corporate governance structure. As private equity's own unique advantages, the private equity canhas considerable influence on corporate governance. Improve the companies Governance structure of ours through the private equity will make a great significance sense to the long-term development ofenterprises.The most special of Private equity investment is the dual principal-agentrelationships.The first agent relationship is between private equity investor and private equity capitalists, and the limited partnership is used to incite and restrict the privateequity capitalists. The second relationship is between private equity capitalists and the entrepreneurs, and the private equitycapitalists can take many tools such as staging investment, equity proportion and financial instruments to the capital structure to entrepreneurs to reducethe agency costscaused by uncertainty and information asymmetry in principal-agent.Also the private equity capitalists, which have professionalfinancial and management knowledge, helpthe invested corporate to construct the framework of theorganization and monitor the invested corporatethemselves so they canachieve their own goals though improve corporate governance of the invested corporate.Corporate governance structure is divided into internal governance and external governance. We can evaluate theinfluencewhich the private equity has made on the corporate governanceby Corporate Performance valuation. In the end of this paperthe case that the investment to China Dairy Holdings by the Morgan Stanley, CDH, Actis investment to test and verify. The most important point of conclusion is that the mechanism ofthe private equity investment can improve the corporate governance.Also thispaper gives some advice to developing the private equity investment market to improve the corporate governance.