The Analysis Of The Relationship Between Private Equity Funds And Enterprise Value Based On The Growth Enterprise Market

In the past thirty years,the private equity funds in China accompanied potential enterprises by providing them with professional services such as equity financing,mergers and acquisitions,strategy consulting and so on.After entering this new period,for serving the development of new economy and industry transformation better,the private equity funds have made abundant valuable practices nowadays in the process of fund-raising,investment,management,and exit.On the background above,this paper researches the relationships between private equity funds and enterprise value to clarify the meaning of the existence of the private equity funds,and meanwhile,provide the new perspectives for the entrepreneurs to choose better private equity funds,and for regulators to design better policies to promote the development of the private equity industry.This paper starts from theoretical analysis,learns from previous similar research,and then raises the specific issues below to study,that is,the first question,whether there is obvious difference on the enterprise value between the companies with and without support from private equity funds,and then the second question,if the difference exists,then what are the sources of such difference.This paper takes 394 GEM listed companies from 2009 to 2014 as the research objects and establishes two multivariable linear regression models respectively corresponding to the two questions above.We select TobinQ that represents enterprise value as explained variable;In the model to the first question,we select a dummy variable—whether the companies with and without support from private equity funds,as explaining variable.In the model to the second question,we select five variables as explaining variables,that is,the reputation of private equity funds,the time that private equity funds hold the shares of invested companies,the shareholding ratio of invested companies that private equity funds aggregately hold,the experience and the number of private equity funds that invest the same company.In addition,we control the variables of the invested enterprises in the two models,that is,increase rate of business revenue,ROE,asset scale,ownership concentration and the industry index.After carrying out regression of the models and analyzing the regression results,this paper draws the following conclusions from two models: Firstly,to the first question,we find that companies with support from private equity funds have better value performance than the companies without.Secondly,to the second question,we find that the companies with high reputation private equity funds have better value performance than the companies with low reputation private equity funds,and meanwhile,the time that private equity funds hold the shares of invested companies have obvious positive relation to the enterprise value.However,the shareholding ratio of invested companies that private equity funds aggregately hold,the experience and the number of private equity funds that invest the same company all have no obvious relationship with enterprise value.This paper not only proves the existence of the difference of the value performance between the companies with and without support from private equity funds from qualitative analysis angle,but also researches the concrete sources of such difference.What's more,the sources considered in this paper are more than previous similar research.Larger sample size and longer time span of sample are also the highlights of this paper.This paper enriches the study on the relationship between private equity funds and enterprise value,and its research conclusions can help both entrepreneurs to choose better private equity funds and government to develop policies that benefit private equity industry.