View Full Version : Private Equity Investment

March 29th 09, 02:47 PM
Private equity investment is money invested in companies that do not
trade on the public stock markets. Private equity investments run the
scope of corporate finance strategies from financing new companies to
infusing capital in established companies. Channels that include
private equity include: leveraged buyouts, venture capital, real
estate & special situations.
Private equity fund managers negotiate acquisition prices and terms to
often obtain significant control of billion dollar ventures. They take
a vigorous role in monitoring and directing the companies in which
they invest. They frequently change management to ensure their
strategic plans are implemented forcefully and efficiently under 100
day plans. This provides them the opportunity to enhance returns by
directly influencing the company and eventually creating value. While
private equity investments typically span five to eight years, quick
flips of two years or less are not uncommon. Here's a quick idea to
some of the other investment options.

Mutual Funds; a mutual fund is ideally a professionally managed pool
of cash from a group of investors. A fund manager invests your funds
in securities, including stocks & bonds and decides the right time to
buy and sell adhering to the fundís stated investment objective (eg,
capital preservation, growth, income, etc.)

Savings Accounts; along with mattresses are a fine place to keep your
crisis funds.

Money Market Accounts; generally make somewhat higher interest than a
savings account but still permit easy access to your funds.

Bonds; when you buy bonds you basically loaning money to a corporation
for a definite period of time, known as term. The bond certificate
promises that the issuing body will pay you back the principal on a
particular date with periodic fixed interest payments at the coupon

Stocks; similarly when you purchase stocks, you technically own a
piece of a companyís assets. If the company performs well, you may
receive intermittent dividends and be in position to sell your shares
of stock at a profit, generating a tax liability in many countries.

David E Simpson
Director Investment at Starling Group