Private Equity Fund Investment Decision-making And Operation Management Research

Since private equity（PE) fund was introduced into China, has gone throughmore than a decade. Private equity investments has been a great development in thecontext of China’s economic reform, the amount of investments be continuedincreasing. Chinese government is also increasing emphasis on innovation-drivenand entrepreneurial talent, private equity funds can provide capitals to small andmedium enterprises(SMEs), and evolved into an effective financial tool, improvedSMEs technological innovation and accelerated development strategy, acceleratedthe docking between social capital and the industrial development. PE funds areconsidered to play a role to increase the speed of the national economy development.However, domestic private equity funds management operations uneven levels,most of fund managers do not have a clear process in the investmentdecision-making and operational management, their decision-making process relieson past experience and intuitions, many funds are positioned to hunt the pricedifference between the primary and secondary markets, and to obtain the hugeprofits in a short term. They don’t pay attention to take advantage of their ownadvantages in management experience and capital operation, to optimize investmentoperations and management, ultimately enhance the value of investee enterprise.These are the backward mode of operation, and no longer meet the new era ofprivate equity funds to participate in invest-market competition.In view of this, this paper attempts to start from the concept and essence ofprivate equity funds, reference to the A PE-fund’s practice,with the fund’sinvestment process “Invest、Manage and Exit”, to mack analysis and research.Especially innovative mentality and research for project selection andafter-investment management, which have be ignored by most practitioners. In orderto provide some practical guidance and references for the private equity industry.