Research On Value Creation Based On Post-investment Management Of M&A Funds

At present,China’s economy has shifted from the stage of high-speed growth to the stage of high-quality development,and the stock industries are facing the challenge of improving quality and increasing efficiency.M&A funds with the function of value discovery and post-investment management to empower invested enterprises have unique advantages in revitalizing the stock industries and are an important driving force for the transformation and upgrading of the real economy.Therefore,by studying the value creation based on post-investment management of M&A funds,the mechanism of value creation based on post-investment management can be further grasped,which is of practical significance to promote M&A funds to better serve the transformation of the real economy.To deepen the understanding of post-investment empowerment,this thesis analyzes the specific process of M&A funds’ empowerment of enterprises and value creation through post-investment management,and expands the basic M&A theory with the idea of real options to interpret value creation under post-investment management according to the characteristics of value creation.Specifically,firstly,there is an introduction of the value assessment model in the basic M&A theory,the characteristics and ways of value creation by post-acquisition management,as well as the analysis of the limitations of the basic M&A model.The real options approach based on the characteristics of value creation under post-acquisition management is also introduced to lay the theoretical foundation for the later case study.Secondly,two aspects of research are carried out with the case study of the acquisition of Belle by Hillhouse: firstly,the specific process of the value creation model of post-investment management is analyzed,not only by focusing on specific post-investment empowerment measures,but also by analyzing the important role of value discovery in value creation to form a more comprehensive understanding of the value creation process;secondly,the limitations of the method are explored through the application of the basic M&A model in the case study,and the applicability of the real options method is analyzed.The study shows that:(1)The accumulation of resources in e-commerce and manufacturing industries is the basis for value creation in the investment process in Belle.(2)In terms of value discovery,Hillhouse seek space for value creation by judging the development trend of the fashion industry and identifying Belle’s core competencies,which determines the tone of post-investment management.The real options approach was able to explain the potential value ignored by the basic M&A theory.(3)In terms of value realization,based on the pre-investment value judgment,Hillhouse improved Belle’s competitiveness in various ways such as corporate strategy adjustment,marketing empowerment,operation empowerment,supply chain empowerment and capital operation.(4)On the effectiveness of the value creation,the post-investment management has improved Belle’s business performance,resulting in an IRR of 19.59%,which is better than that of the comparable companies for the same period,namely 7.55%.There are the following insights about value creation under post-investment management:(1)In terms of pre-preparation,emphasis should be placed on industry expert pool construction.(2)In value discovery,emphasis should be placed on industry research and enterprise research.(3)In value realization,the post-investment management plan should take over the basic judgment formed before the investment and fully consider the opinions of industry experts.