Study On The Performance Evaluation Of Sub-Funds Invested By Private Equity FOFs For High-Tech Industries

The high-tech industry,where high growth and income coexist,has been one of the most concerned industries for private equity FOFs in China.But since the FOFs managing partners does not directly participate in the sub-funds’ investment process,the profit-seeking nature of the sub-funds is usually inconsistent with the industrial strategy orientation of the FOFs,and that situation could lead to principal-agent problem of sub-fund deviating from the investment objectives of the FOFs,damaging the interests of the investors,and the financing support for high-tech companies.At present,as many FOFs in China have completed their investment and entered the more-than-5-year exit period,the moral risks of sub-fund managers should be avoided to ensure that the sub-funds can fully achieve their investment objectives.To address the problems above,this paper establishes a sub-fund performance evaluation system for high-tech industry FOFs,to cater to the post-investment management needs of the FOFs managing managers,so that they are kept updated of the investment operation of sub-funds,proactively discover possible risks and problems,urge the sub-fund managers to prevent and solve them in advance,and form an effective supervision and discipline.At the same time,it is important to examine the possible industrial synergy effect formed by each sub-fund and take the initiative to provide relevant resources and value-added services to improve the current passive situation in post-investment management.Therefore,after analyzing the current operation status and related problems of high-tech industry FOFs,this paper refers to many literatures and superior experiences of domestic and foreign excellent FOFs in evaluating the performance of sub-funds,and designs a performance evaluation system around the core needs of FOFs investors and the strategic orientation of fund in three major aspects,namely,the achievement of investment objectives,operations management and profitability,and AHP analysis is used to determine the weights of the indicators,which facilitates the FOFs manager to conduct regular and comprehensive analysis of the sub-funds.Subsequently,this paper presents a case study of a pharmaceutical and technology industry M fund,and on the basis of proposing a sub-fund dynamic performance measurement model,the evaluation result obtained by applying the above performance evaluation system is "average".Considering that the sub-fund has just completed all investments and has not yet taken comprehensive and in-depth post-investment management measures,the evaluation result suggests that the FOFs managers should actively pay attention to the post-investment management of the sub-fund managers in the next stage It is suggested that the FOFs managers should actively focus on the active management behavior of sub-fund managers,continuously explore the possible synergistic value of different enterprises in the portfolio,and explore the advance construction of the exit mechanism at the same time.Finally,the paper concludes with a summary of the whole paper and provides some practical suggestions on how to strengthen the post-investment management for FOFs managers.