A Study On The Impact Of Personal Characteristics Of Private Equity Funds On Fund Performance

With the development of the socialist market economy, private equity has become one of institutional investors in the capital market which can not be underestimated. Despite the private equity fund started late in China, it also attracted lots of interest from domestic investors because of the characteristics such as issuing only for specific investors, operating privately, flexibility investing and so on. The promulgation of the latest Law on Funds for Investments in Securities offers a legal foundation for private equity, and firmed confidence for investors. For the majority of investors, fund managers are the direct manipulators. To a great extent, to choose a fund is to choose a fund manager. In such a case, it’s necessary to do a study from the perspective of the fund managers. By selecting the relevant personal characteristics variables of the private equity fund managers, this paper explore its relationship with the private equity fund performance.Not only for investors, the study of private equity fund manager personal characteristics on fund performance also have important significance on fund companies and the regulators. From an investor perspective, the knowledge of the private equity fund managers’personal characteristics can improve their probability of choosing funds; in the personnel appointment, the fund companies could consider observing the managers’personal characteristics and as standard, those companies could select a better quality talents; in terms of the regulators, the constitution of the appropriate manager evaluation mechanism may regulate and promote the development of private equity fund industry.In this paper, we use upper echelons theory as the theoretical foundation and draw on the experience of the related literature of the world. Meanwhile, an empirical research was conducted on the association between fund manager and performance of the private equity fund using multiple regression and quantile regression methods. Unstructured sunshine private equity funds of which the managers have not been changed during a certain accounting year from2007to2010were selected as research subjects, and the study period was in a full year of2012.7index characteristics of fund managers (profession, the record of graduated schools, degree, working experiences, the amount of private equity funds under management, the core of the company, background) were set as independent variables, whereas Sharpe ration and Treynor ratio were set as dependent variables and the size of the fund company, the year since fund establishment as control variables. The main conclusions are listed as follows:the fund of which manager was major in economics and management were better in performance; significant and positive influences were found between the amount of private equity funds under management in the fund performance; the fund managers who ever worked in department companies were more excellent in the fund performance.