An Research On Influencing Factors To Investment Return Of Private Equity

Since the opening of the China gem, the investment and financing mechanisms are more concerned about high growth of listed companies. The high growth of companies not only impacts the company’s growth, but also determines the investment return of the various investment and financing mechanisms. Among these mechanisms, Private Equity is one of the most benefit mechanisms in this kind of environment. Private equity investment is an equity investment, and it not only provides funds for the enterprise, but also obtains return by providing value-added services. Therefore, in order to study the influence factors of the private equity investment return, we will give the answer from the perspective of enterprise growth.After the founding of the gem, the average rate of return was10.34and13.30in2009and2010. But the return rate was reduced to7.94in2011, and the third quarter of2012was only2.73. But after careful analysis, in the same capital market environment, we find the highest return and the lowest return have an enormous range, respectively is24.04%and-0.15%. Apparently, the enterprise’s growth such as profitability, innovation ability, debt-paying ability, operation ability is one of the important factors those impact investment return.The content and structure of this paper are as follows:The first chapter is introduction. In the introduction, based on this phenomenon of the enormous range between the highest return and the lowest return, we raise the research questions of this paper, and then elaborate the research background of this paper, the purpose and significance of this study, research methods, frame structure and innovations.The second chapter is the theoretical basis. In this chapter, the concepts related to the growth of the growth of enterprises, private equity investment are defined firstly. Secondly, the PE investment theory is described. Finally, the enterprise growth cycle theory and enterprise innovation theory are stated. The third chapter is the literature review and hypothesis. In this chapter the growth evaluation index of the enterprise on board and the effects of private equity investment return are reviewed. By literature, we discover, domestic and foreign scholars think that the growth of enterprises is one of the key factors of private equity investment, however, scholars not make an in-depth study on how to influence private equity investment return. Therefore, based on the growth of China’s GEM Board companies, this paper explore the affecting factors of private equity return. This paper counts the5factors of the growth of the enterprises those eager to board the capital market as5dependent variables, and analysis the relativity between the5characteristics of the growth of the enterprises and the private equity return.The fourth chapter is the variable design and model selection. In this chapter, we see private equity return as the dependent variable, the enterprise growth as explanatory variables, location of private equity, industry growth as control variables and select the138companies as the sample, take the method of factor analysis and multiple regression model to verify the relationship between corporate growth and private equity investment return.The fifth chapter is the empirical results and analysis. In this chapter, firstly, the sample data is described, secondly, the variables are processed by the factor analysis method of factor. Finally, the empirical relationship between enterprise growth and private equity investment return. is tested.The sixth chapter is the conclusions and recommendations.Through the above research, we get the following conclusions:1. There has a positive correlation relationship between the growth of enterprises and private equity investment return.2. There has a positive and significant relationship between enterprises operating ability, profitability and private equity investment return. Innovation ability, cash flow and investment return rate has a positive correlation with private equity investment return, but they are not significant relationships.