Private Equity Fund

Private Equity

What is PE Fund?

Private Equity is an alternative mode of financing which is for investors who invest in private companies. Private Equity fund is normally use in funding private companies for expansion, growth, new technolgy, acquisitions, expanding working capital and bolstering balance sheet of the companies.

How companies benefit from Private Equity Fund:

  •  Companies can access to fund for their expansion or growth strategies planning without going for expensive conventional financial bank loan.
  •  Newly startup companies can access to Ventur Capital fund for their early stage startup plan.

 “They usually purchase a controlling share in a company, bring in a combination of debt and equity, and manage the company in a way meant to increase its worth,” explained the New York Times. “Ideally, everyone profits when the company is sold, including the former owner, who gets a slice that is worth more than the original pie.”

Types of Private Equity Fund:

Venture Capital (VC)

VC meant for investing on small, new startups or emerging business entities which have high growth poitential. Such as, companies with innovative technology and long term profitable contracts and etc.

Buyout / Leverage Buyout

This fund is the complete opposite of VC fund. Instead of investing in newly startup companies, it is used to invest in matured companies. 
It can use to buy out entire stake holding of a company. 
New management team and new board of directors wil be installed.
Founder(s) may or may not continue to manage the business.