Research On The Effects Of Private Equity Investment On Corporate Performance

Private Equity is the result of financial innovation and industry innovation, and it is important phenomenon of the global financial market in recent years. It has widen the financial channels of many companies, and promoted the companies’ value been discovered and added by the market. By the same time, Private Equity has provided a channel that is high reward and is playing a key role in the global financial system nowadays.Nowadays, theoretical circles are not yet clear about the effect which Private Equity gives on the economy while their knowledge of the effect main comes from foreign private equity market. But in view of china is in the transition period, imperfection of system and corporate governance, and simple capital market system result in the juvenility private equity institutions and managers. It may make the Chinese market different from the result of foreign research.This article put forwards the theory of corporate governance and financial intermediary on how the private equity influence the invested companies, discussed the relations between invested companies and private equity through the IPO that is the main withdrawing channel of private equity. At the same time, this paper studies the short-term and long-term performance of the invested companies based the empirical analysis on Shenzhen SMEs Board and Growth Enterprises Board, which to examine the suitability for the thesis of private equity’s efficacy.By the way, the research of this article answers the question of what is relations between private equity and the performance of invested companies, and propose the theoretical basis and policy advices that how to develop the private equity sector of China. It has a practical significance for innovation of corporate governance structure, building the capital market system, improving the system for financing and investment, the financial innovation, transition and escalation of industrial structure.