What is Private Equity ?
Private equity is a blanket term, which refers to companies that pool investors’ funds to invest in undervalued companies and assets. The aim of private equity is to provide a high return to investors on those assets, assigning expert management teams to manage the companies and assets outside of the glare of public markets
The investment targets can be public or private, but if public , will be take private by the private equity company over seeing the investment
How does Private Equity Work ?
Private equity (PE) refers to investments made in private companies that are not publicly traded on stock exchanges. Private equity firms raise funds from various sources, such as institutional investors, high net worth individuals, and pension funds. The funds are then used to make investments in private companies that have growth potential.
Private Equity Fund
The Capital Raise
Post-acquisition Operational Improvement
Characteristics of Firms that Private Equity Invests in
If there is a single theme that unifies all private equity investments, it is that the companies or assets being invested in are undervalued in some way.
Either because their current owners have not spotted the potential of the business, have mismanaged it, or have not been able to access the capital to bring the company to scale, the private equity company seeks to add value that will ultimately generate investor returns.
Beyond this, private equity companies also pay attention to issues such as