Based on multiple case studies of the transactions in China by private equity funds, this paper attempts to explore the value-creation capabilities of private equity funds at the transaction/deal level.
Previous studies on financial performance of PE funds utilized data collected from publically traded companies in European/US markets. By measuring financial performance of both “pre- and post-transactions,” these studies researched two questions: 1) Do buyout funds create value? 2) If they do, what are the sources of value creation? In general, studies conclude that private equity/buyout funds do create value at both the deal level and investor level. They also identified four possible sources of such value creation: 1) undervaluation, 2) leverage effect, 3) better governance, and 4) operational improvement.
However, relatively little is known about the process of value creation. In this study, I attempt to fill that gap, revealing the “secret recipe” of value creation.
By carefully looking into the process of value creation, this study suggests five propositions covering capabilities at 1) deal selection/screening, 2) deal structuring, 3) operational improvement, 4) investment exit, and 5) Top Management Team (TMT). These capabilities at private equity/buyout funds are critical factors for value creation. In a thorough review of the value-creation process, this paper hopes to:
1) Share real-life experiences and lessons learned on private equity transactions in China as a developing economy.
2) Reveal the process of deal/transaction to observe measures taken place within deal/transaction for value creation.
3) Show how well-executed strategies and capabilities in deal selection/screening, deal structuring, operational improvement, and investment exit can still create value for private equity firms without financial leverage.
4) Share the experience of State-Owned Enterprises (SOE) reform participated in by private equity firms in China. This could provide valuable information for policy makers in China.
There has been much debate in the world of academia over the valuation of conglomerates. This thesis proposes the use of the EVA theory in explaining fluctuations in conglomerates’ valuation, and we believe that ROIC, WACC, and ROIC-WACC are three indicators that to a certain extent explain these valuation fluctuations. Through analysis of a sample containing 23 conglomerates, this thesis finds that ROIC, WACC, and ROIC-WACC exhibit positive correlation with valuation fluctuations. In the case study on Fosun, this thesis finds that ROIC-WACC is highly correlated with Fosun’s valuation fluctuations and next with ROIC. Thus this thesis conjectures that for investment companies for which investment capital is derived largely from insurance float, such as Fosun, ROIC-WACC is a better valuation tool.
The current study combines field study, survey study, and public financial reports, and conducts an in-depths comprehensive study of the cost of the global tire industry. By comparing the price and the total cost structure of standardized tire products, we investigate Chinese tire industry’s global competitiveness, especially in light of China’s fast increasing labor cost. By constructing a comprehensive cost index (CCI), this dissertation estimates the evolution and forecasts the trend of global tire industry’s cost structure. Based on our empirical analysis, we provide various recommendations for Chinese tire manufacturers, other manufacturing industries, and foreign trade policy makers.
This article can be divided into six parts.
The first chapter analyzes the background, theatrical and particle reasons of this research. The author argues that the management of law firm needs a set of good system. The first one is operating the law firm in scale, and the other on is corporate management model, which shall be constructed in detail in the paper and will be put into practice by the law firm in which the author is worked.
The second chapter will introduce modern management theory, combining the situation of management in our law firm to analyze, raising some reasonable suggestions and instructions to promote our law firm to achieve the corporate management.
In the third chapter, the first chapter, starting with the review of the development process of foreign and our law firms, listing the organizational forms and the characteristics of our law firm, analyzing the situation and the drawbacks of the law firm management.
The fourth and fifth chapter introduce he background, the connotation of the corporate management model, listing the development and successful experience of some typical cases in respect of corporate management.
In the last chapter, the construction of corporate management model will be introduced in terms of organization form, human resource management and informationizing development.
The corporate management model is not mature in china. Though it is not easy to reform the existing model, but it should be believed that the development benefiting the legal industry will be achieved.
During the past decade, the Chinese bond market has been rapidly developing. The percentage of bond to total social funding is constantly increasing. The structure and behavior of investors are crucial to the construction of China’s bond market. Due to specific credit risks, bond market regulation usually involves in rules to control investor adequancy. It is heatedly discussed among academia and regulators about whether individual investors are adequate to directly participate in bond trading. This paper focuses on the comparison between individual and institutional bond investors, especially their returns and risks. Based on the comparison, this paper provides constructive suggestions for China’s bond market development and the bond market investor structure.