Research Of Target Enterprises Value In Private Equity Investment Based On DEA Model With Preference

In1976, the first private equity firm American Research and DevelopmentCorportion established, which was the signal of that PE has been put on the stage ofthe world’s financial markets. The characters of high-risk and high-yield is the reasonits popular around the world. In1990s, PE investment entered Chinese financialmarket officially. With the rapid development of economy, China has truly entered theera of investment, also PE industry has been recognized gradually after markettempered. At the same time, a large number of PE investors were cultured. In recentdecade, the reform of non-tradable shares; the launch of the GEM and small plates;three new board com to power; as well as the PE market continues to open up; raisecapital threshold lowered; relax the binding of investment projects; and exit channelspatency, greatly promoted the China’s PE development.From the1970s, foreign scholars have studied on the issue of PE industryassessed value of the target enterprise. So far, those foreign countries have establisheda relatively mature evaluation system. However, although the research in China isconstantly increasing, the domestic evaluation system is still immature, due to the latedevelopment. Firstly，lack of the target enterprise evaluation system for Chinesemarket, the assessment method is still in exploratory; Secondly，due to the lack ofmarket openness, the relevant data is difficult to obtain, severely reducing thefeasibility of empirical research.In this paper, five dimensions to address the problem, which based on finance,marketing, operations, sustainability and risk by the literature search, expertinterviews, questionnaires and other research methods. These five dimensionsincludes revenue growth, net profit growth, operating cash flow growth, thecompetitiveness of products, customer satisfaction, quality of management, marketingcapabilities, company business development strategy, research and developmentcapabilities and the possibility of listing which formed a target enterprise valueassessment index system with10indicators. And summed up the shortcomings of theexisting models abroad assessment model, coming up a DEA model with preference.The model can be based on the decision-making preferences characteristics of the PEinvestment manager to narrow the filter range after analyse target companies.Moreover, in this paper, I tested the research results of Assessment Index System and with DEA model with preference. And the results showed that the model could helpinvestment managers to filter out the competitive enterprise.