Chinese Private Equity Fund Characteristics, Returns and Fundraising

Sammanfattning: Private equity firms have been playing an important role in the global financial market. In 2006, the asset under management was only 1 100 billion CNY, and in 2017, the figure has reached 8654 billion CNY. However, with the economy walking towards a more mature phase, the past driver ---- strong economic growth is no longer the reason to explain the significant growth of private equity firms in China. We think it would be of great interest to look into the possible drivers to give us a better understanding of private equity firms in China. In this paper, we would like to test a number of factors that could possibly drive Chinese PE industry performance, including persistence, size, experience of managers, different type of funds, and industry concentration with a linear mixed effect model. As a result, we find that past performance is positively related with PE performance. Size and performance have a positive and concave relationship but the relationship is not stable. Industry concentration is vital for PE performance in China. Also, we find that past record has a great influence on the GP's next fund raising.