Study On Risk And Performance Of "PE+Listed Company" Fund

As a result of the integration of financial capital and industrial capital,“PE+ listed company” M&A fund is organized by listed companies and PE,it always depends on the development strategy of the listed company to carry out investment.When exiting,it will give priority to selling the invested enterprises to listed companies,in which listed companies usually serve as limited partners and PE serves as general partners.Different from foreign mainstream PE dominated M&A funds,“PE+ listed company” M&A funds can be called as Chinese unique investment tools that developed in domestic specific environment.Industrial M&A fund fully caters to the needs of the capital market,since the establishment of the first “PE+ listed company” M&A fund in 2011 by Silicon Valley paradise and Dakang animal husbandry,it has been followed by many investors and risen rapidly.According to the statistic that author classified,from January 2012 to December 2018,A total of 673 listed companies in China established 1049 industrial M&A funds.Under the current situation where review of overseas mergers and acquisitions is stricter,“PE+ listed company” M&A fund will be the development direction of China’s private equity fund,and it will also be the preferred plan when Chinese enterprises finance for overseas mergers and acquisitions.At present,domestic scholars mainly analyze the entire operation form of “PE+ listed company” M&A fund based on the data released by listed companies and the current macro industrial environment.However,study on this mode’s risk and value creation is fairly not enough,and the research of value creation mostly focused on the influence factors for fund to create value.Therefore,this article simultaneously analyzes buyout fund from the perspective of the benefits and risks,which not only analyze the potential risks of this mode from the external environment and internal process,but also study whether M&A fund can bring positive benefits for listed companies from the angle of performance,and verify whether it’s ability about value creation higher than company directly merger.At the first place,this paper makes literature review about those literatures that depict the risk and performance when listed companies established the fund to acquire,and then collect the data of domestic buy-out funds from Choice database.Next this article selects wooden Tomlinson accepting LEDVANCE equity in 2017 as case,conducting empirical research and case analysis at the same time to explore whether buyout fund can bring value for the listed company in the short-term and long-term,and analyzes the risk when listed companies in China to set up the industry layout to conduct overseas mergers and acquisitions.Finally,some suggestions are put forward for the development of industrial M&A fund market according to the research conclusion.According to this writing,we can find that: the market performance acquired by the merger and acquisition of industrial fund is much higher than that of the direct merger and acquisition of listed companies;industrial funds can bring benefits to the company in short term as well as in long term,although the benefits are not enough in the initial stage of integration,the benefits are obviously improved in the later stage;risk exist in both external environment and internal process,in addition to the general financing risk and pricing risk in the process of merger and acquisition,it also faces dual principal-agent risk and PE exit risk.The innovations of this paper are as follows: first,the establishment of M&A funds in 2012-2018 is sorted out,and then the market performance of M&A funds is analyzed by using sorted data with setting up the experimental group and the control group.Second,this paper analyzes the risks and hidden dangers existing in M&A fund from the perspective of external environment and internal process,and expands the research perspective.