What factors determine the decision of Private Equity fund exit strategy-Case study in China

• Main Authors: Chiang, Yen Chin, 江彥瑾
• Other Authors: 吳啟銘
• Format: Others
• Language: zh-TW
• Published: 2016
• Online Access: http://ndltd.ncl.edu.tw/handle/q759r2

碩士 === 國立政治大學 === 企業管理研究所(MBA學位學程) === 104 === Corporate financing have many ways, whether using private placement from Private Equity Fund depending on the PE firm what can bring resources to the company including the strategy, business and the human capital. When the PE fund exit will exchange the equity from the target company to other entity. There are four kinds of exit strategy discussed in thesis are Secondary Buyout(SBO), Buyback, IPO and M&;A. From investment firm’s perspective, there are three issues discussed as below: Issue One, what the relationship between the exit strategy and the factors determined the decision of Private Equity fund exit strategy. Issue Two, what the correlation between the investment firm decision and the result of “the Issue One”. Issue Three, what factors determine the decision of Private Equity fund exit strategy. Issue One: There are four complex factors. “The investment firm’s inner decision factors” are “the power of the LP in PE fund” and “the risk and the performance requirement of the investment firm”. “The external environment factors” are “the regulation&; the policy of the capital market and the capital market efficiency” and “the cost of capital and the capital utilization efficiency”. The consequent concludes two Strategy Group, “IPO with M&;A” and “SBO with Buyback”. Issue Two: there are no significant difference with the Issue One. Issue Three: In Strategy Group One(IPO or M&;A), which “the power of the LP in PE fund” is the key complex factor that determines the strategy choice. In Strategy Group Two(SBO or Buyback), which “the regulation&; the policy of the capital market and the capital market efficiency” is the key complex factor that determines the strategy choice. In the content of the exit strategy management decision, “the external environment factors” are more than “the investment firm’s inner decision factors”, which means that the intricate external environment and the dynamic of the complex strategy management. There are two conjecture in the thesis. First, whether “the investment series round timing” is the key factor determine the choice between the two Strategy Group. Second, whether “the higher valuation” in the later series round is hard for the investment firm choosing “Buyback” to exit.