Research On The Performance Of China 's Private Equity Funds

China’s PE funds have experienced an explosive growth in the last decade, and more and more investors begin to pay high attention to PE which results in a rush of money into the PE market. However, there exists a so-called mystery of PE’s performance:on the one hand in the industry field people initially regard that PE has high return together with high risk, then they think that PE has high return together with medium risk, and finally they even believe that PE has high return only together with low risk; on the other hand, by studying the performance of PE in the United States and in Europe, foreign scholars have found that the performance of PE doesn’t outperform the market index. So it is very important to study of the performance of the China’s PE. This kind of study can not only give some guidance and recommendations to capital markets and investors, but can also make up for this academic blank.This article had selected4751observations of1105PE funds during1991to2010. And this paper mainly studies the performance of the PE funds, the effects of exiting successfully on the performance of the PE funds, the factors which cause cross-sectional differences among the individual PE funds, and whether the performance of the PE funds persists. The empirical results show that in the limited sample the performance of the PE is higher, and can obtain excess returns compared to CSI300, while in the full sample the average return of the PE funds is not so high and cannot obtain excess returns compared to the CSI300. This article also finds that whether exiting successfully or not has a significant impact on the performance of the PE funds, and the place of listing, the industries that the enterprises belong to and the currency of the investment funds have business with why the performance of the individual PE funds exist cross-sectional differences. And this article also finds that the performance of PE funds persists. Finally, this article predicts the performance of the PE funds which take part in investment in2011.