Abstract: Taking the A-share companies listed firstly during the period of 2006-2011 in Shanghai and Shenzhen stock markets with the participation of private equity investments as the research objects, this paper from the perspective of the characteristics of PE investment conducts a study of the behavior of reducing holding-shares after the lockup period of China’s PE investment is lifted. The findings show that if the PE holding is higher, the investment period is longer, and a director is accredited to the enterprise being invested, the holding-shares will be reduced less, but the reducing scale of PE investment with the combined strategy will be larger. In view of the investment background, the reducing scale of PE investment with foreign fund background will be even less. Further study reveals that compared with PE investment with private background, the reducing scale of PE investment with state background is much less. The conclusions of this paper can not only enrich the relevant literature of reducing holding-shares by the insiders and PE investments after IPO, but also help the outside investors understand the reducing behaviors of PE investments after IPO of the investment companies.

Key words: PE investment; behavior of reducing holding-shares; investment horizon; investment background