A Case Study Of Equity Investment Decision Of ZS Private Fund

Private equities finance funds through non-public method and invest the equity inprivate companies. They act as the major financial investors and have an influential impact onthe operation of the companies. After that they quit and benefit from the investment. Thismethod overcomes the difficulties of financing involved in the small-and-medium enterprises,boost the development of national economy and allocate the resources more reasonably. PE isquite risky, with bad liquidity, asymmetric information, long cycle, and involved withexpertise. In this case, it is very significant to have a deep understanding of the objectivecompanies and a thorough and correct evaluation. In China, there are many PE theorems andpractical research, but, as to how the PEs invest, evaluate the projects and make decisions,related research is scarce. As the development of the PE market, optimization of theinvestment of equity investment, standard operation of small-and-medium enterprises andhave a successful coordination become very significant.The article focuses on the project executed by ZS Private Equity, based on thebackground of the PE, procedure of the investment in equity, reasons for investment and theevaluation of investment value. PE is a complicated system with theorems, methodologiesand practices. In that case, this article states the logic, investment procedure, enterprises duediligence, financial analysis and evaluation methods in projects selection of PE through thediscussion of ZS’s analysis of industry, commercial mode, financial status and exitingstrategies in project A.The analysis of the case is of great impact on the PE and small-and-medium companies.For example, the standardized investment procedures, Telematics’ selection of objective,evaluation of the investment values, exiting strategies and risk control are beneficial to PE.Besides, it is very instructive for how the developing small-and-medium enterprises attractPE. There are some tiny defects in the studies in the article; however, it is convincing that thisarticle can certainly provide some valuable information for both PE and small-and-mediumenterprises.