An Empirical Study On Equity Structure And Fund Performance Of Fund Management Companies In China

Since the end of 1997,after the transition from the old fund to the new fund,the Chinese securities investment fund industry has been the fastest growing one in the financial sector.However,there are still some problems behind the vigorous development of this industry,such as the frequent occurrence of fund blackouts and after-hours trading.These problems are closely related to the mismanagement of fund management companies,and as an important part of the internal governance mechanism,the shareholding structure is fully exposed to the possibility of its problems.The fund management company has absolute management and control over the fund assets,and it is in a leading position in the entire fund operation system.According to relevant researches,the internal shareholding structure of a listed company has an impact on its performance.And as a special financial enterprise,the equity structure of a fund company is different from that of an ordinary listed company.So,will this unique ownership structure affect the performance of the fund and how it will affect it? This is exactly the issue that this article focuses on.The shareholding structure can have an impact on the value of the firm,which is determined by the close relationship between the shareholding structure of the firm and the internal governance mechanism.the difference in ownership structure means the difference in control,because it means that whether there are important control mechanisms within the company.To complete the normative transformation,the fund industry should make a deep analysis of the internal ownership structure of the fund management company.Therefore,the research content of this paper has certain theoretical and practical significance,and it also has reference value for the development of fund format.This paper introduces the special history of the development of the equity structure of fund management companies,and summarizes the characteristics of the fund company's shareholding structure.In the empirical part,between 2010 and 2017,278 open-end equity funds belonging to 64 fund management companies were used as samples,and the Fama-French model was used as a measure of the quality of investment and performance of the fund.This paper introduced six explanatory variables to explore their relationship with the fund's investment performance,they were the shareholdings ratio of the first major shareholder,the top two shareholders and the top three shareholders,the Z index,the HHI index and the number of shareholders.In the end,the article drew the following conclusions: At present,the number of shareholders of Chinese fund companies is small,generally no more than three major shareholders,and the simpler the shareholding structure,the higher the concentration of ownership.Compared with ordinary non-state-owned fund companies,state-owned fund companies tend to have better performance,indicating that the government's helper effect has significantly improved the performance of funds;in addition,Sino-foreign joint venture funds did not give play to the advantages of management and investment technology brought by foreign shareholders,and its performance was negatively correlated with foreign investment.In addition,the equity structure with more diversified equity and balanced development among major shareholders can help fund companies to increase their performance returns.At the end of the article,combined with the completed empirical research and the current situation of fund management companies,the writer analyzed the possible reasons for the relevant conclusions and proposed corresponding policy recommendations from the perspectives of fund management companies,fund investors and fund industry regulators.Fund managers should optimize their shareholding structure and actively reduce the concentration of ownership and the restrictions of the largest shareholder on other shareholders.Fund investors should also pay attention to the ownership structure characteristics of the fund companies when making investment decisions.The best choice is funds managed by companies with a background of state-owned assets and low concentration of ownership.In addition to the above,fund industry regulators should also pay attention to guiding fund companies to implement supervision on their internal management,avoiding excessive concentration of equity which may cause more problems,and preventing major shareholders from interfering with and handling the operation of the fund.Relevant laws and regulations should legally regulate the behavior of fund companies to introduce foreign capital.Investing in domestic fund companies for foreign investment requires a comprehensive inspection to fundamentally ensure the safety and legality of foreign investment and promote the long-term development of China's fund companies.