Research On Industry Chain Investment Strategy Of Private Equity Fund

With the background of industrial upgrading in China and the increase of institutional investors and high-net-worth investors,private equity funds are playing an increasingly important role in the capital market.In the existing literature,scholars pay more attentions to the factors that affect the performance of private equity funds or its exit channels.However,the researches on investment strategies are mostly one part of these two themes,or only focus on traditional,general investment strategies,instead of targeted researches.Based on the domestic and foreign scholars' research theory,this paper select industrial chain investment strategy for research,using WeiYing cultural industry fund as a case.The industrial chain investment strategy refers to the process of applying the industrial chain's idea in the fund,and in accordance with the industrial characteristics,to implement targeted investment strategies.On one hand,industrial chain theory is used to analyze the framework of fund and it is divided into three parts.The first is supply chain theory,which is used to analyze the investment scope and internal relations of the fund according to the upstream,midstream and downstream of the cultural industry.The second is value chain theory.This part focuses on analyzing the criterion of project screening.The last one is knowledge chain theory.This part illustrates management capabilities of general partners according to the background and investment experience of the fund manager.On the other hand,under the basis of the establishment of industrial chain investment structure,this article thoroughly analyzes the embodiment of industry chain idea in the implementation of the strategy and its advantages,including industrial resource output in vertical chain,diversifying investment risks,and broaden the exit route of private equity fund.Finally,this paper concludes by calculating the fund's return and analyzing the previous case study: The strategy is worth promoting and can be replicated in the capital market.But at the same time,we find some flaws in the investment process,including mistakes of vertical and horizontal industry chain strategy,and the extremely centralized financing source.At the end of the paper,we offer the corresponding recommendations to solve the problems above.In the past,only traditional private equity investment strategies are discussed or used academically or practically,which ignores the applicability of strategy.This paper uses the perspective of management theory to analyze the strategic arrangement of private equity funds from investment,management,and exit processes.It can provide reference for the operation of similar funds,and also provide a new perspective for related research.