Exploring the Impact of Post-Investment Management on Investment Funds

Abstract

Post-investment management is an essential element in the functioning of equity investment funds. The question of whether post-investment management can improve the investment performance of investment funds is controversial. This article examines the impact of postinvestment management on investment performance. The questionnaire survey data from 31 investment institutions and their equity funds data are adopted. The performance of investment funds is measured by the overall exit rate and the proportion of listed IPO exits for the robustness test. Post-investment management is measured by the scale of importance that investment institution employees evaluate their institutions’ focus on post-investment management. The results show that post-investment management impacts the performance of investment funds positively in terms of fund exit rates. However, post-investment management has a limited impact in promoting the exit rate of investment funds. The level of post-investment management and investment funds exit rates exhibit an inverse U-shaped relationship. The finding highlights the significance of post-investment management within equity investment institutions. Nevertheless, investment institutions need to strike a balance between tapping and investing in potential firms and post-investment management. Excessive post-investment management may even reduce investment funds' performance. Hence, a moderate level of post-investment management is recommended.