Research On The Stock Performance Of The Establishment Of Buyout Fund By The Listed Companies

Buyout fund was originated from the United States in the mid-20th century.The first buyout fund in China was established in 2003.Setting up buyout funds has become a common mean for listed companies to leverage financial capital to accelerate their growth.With more and more buyout funds set up recent years,we are able to extract more samples for the study.This paper defines the behaviors of buyout fund,summary its origination and development all over the world,and as analyze the advantages and disadvantages from the perspective of tax benefit,interest allocation of LP&GP and so on.This paper also further explains in details of four major steps of buyout funds,including capital raising,investing,managing and exiting..We have summed up a general framework of setting up buyout funds,and elaborated the applications based on the real cases.In short,the announcement of setting up buyout funds will have a short-term effect on the stock price.This paper has taken a sample of 310 listed companies,and built a model which incorporated the stock yields of listed companies during the period from 90 days to 20 days prior to the announcement..The paper then calculates each stock yield rate in a new time period(10 days prior to the announcement and 10 days post the announcement,and verifies factors of the buyout fund influence on stock price by using AR,AAR,CAR,CAAR method.Then the short-term stock price of listed company is fitted by least squares method to further evaluate the significance of each factor.We can make some conclusions:(1)The scale of company buyout fund and the investment of public company drive the significant effects of stock prices.(2)The investment perentage of the public company in buyout funds has significant effects on stock prices.The larger investment percentage leads to the higher stock price effects.(3)The scale of GP investment in buyout funds has significant impacts on the stock prices.The higher GP investment scale causes the more significant stock price effects.(4)The GP investment percentage affects the corresponding stock price effects.The stocks with lower GP investment percentages have stronger stock price effects.Combined with the previous item of conclusion,the stocks with higher GP investment scales and lower percentages have more significant stock price effects.(5)The industry category of the public company has influences on the significance of stock price effects.The industries with faster development have more significant effects of stock prices.6)The public company industry and the buyout funds announcement day of fixed effects study have almost no influence on multiple regression result.