Research On Value Evaluation Of Private Equity Fund Investment Project

In 2014, along with the first administrative regulation which is solely targeted to private equity investment in China coming into effect, the entity of being a Private Equity Investment Firm is officially given legal status as a form of financial institutions after its more than 20 years’ development in China. In recent years, based on rapid Chinese economic development and constantly improving financial system, the private equity investment presents the features of fast development, gradually increasing size of funds, diversified investments covering more and more industries.Although the local private equity investment has been developed for more than 20 years, it is left behind quite a lot and is lack of practicing experience by comparing with developed countries. According to related case studies and work experience, a fact shows that most of time the valuation method doesn’t match the investment projects. This problem not only brings about increasing potential risks of private equity investment, also seriously hinders its development in the long run.This paper gives more insights about three common used valuation methods, and provides with its respective advantages and disadvantages as per different projects. Starting from the applicability of valuation method, by using quantitative valuations for case A to compare differences and analyze the causes, and then achieving the conclusion, all steps lay a firm foundation for future investments. The research of valuation methods in this paper has significant reference meaning for domestic and overseas investment projects, and is conducive to high quality development of private equity investment market in China.