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What is Private Equity?

Private Equity

About Private Equity

What is Private Equity?

Private equity is an alternate mode of private financing, which is composed of funds and investors that directly invest in private companies, What is Private Equity (PE)?or that engage in buyouts of public companies, resulting in the delisting of public equity. These companies are not listed or traded on any stock exchanges.
Private equity investors generally work towards funding new technology, making new acquisitions, expanding working capital and bolstering balance sheets of companies. Private Equity firms also work in the same manner like Venture Capitalists -- invest in the long term in startups to help them grow and then reap benefits after the companies go public or merge with other firms.
 
However, PEs are different as unlike Venture Capitalists who only invest in startups they invest in mature companies also that seek funds to improve their performance. Private Equities make money from management fees and also charge performance fees for sale or turnaround growth of the company.
 

How Private Equity works

Private equity raises funds from institutional investors and wealthy individuals to invest in various assets. PEs invest in stressed assets, in leveraged buyouts of companies with the intention of solidifying its balance sheet or taking it to IPO. PEs also invest in REITs, funding in real estate, and also in Venture Capital funds.
 

Advantages of PE

Private equity offers several advantages to companies and startups.
 
1. PEs are favoured by firms because it allows them access to liquidity as an alternative to conventional financial mechanisms, such as high interest bank loans.
 
2. Certain forms of private equity, such as venture capital, also finance ideas and early stage companies/startups.
 
3. In the case of companies that are delisted, private equity financing can help such firms attempt unusual growth strategies away from the eyes of markets, as these companies don't have the constant pressure of publishing their quarterly earnings.

Latest Updates on Private Equity

Investments by PE, VC funds decline 35% in April to $4.4 bn: Report

2 min read Last Updated :May 23 2024 | 10:17 PM IST
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Goswami Infratech gets nod to delay payment due this month: Report

2 min read Last Updated :May 23 2024 | 3:53 PM IST
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Prosus, Dharana, Vy Capital to buy Urban Company's shares worth Rs 203 cr

2 min read Last Updated :May 22 2024 | 11:01 PM IST
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PE exits in India surge 355% in first quarter of 2024, hit 50 deals: report

5 min read Last Updated :May 21 2024 | 12:53 PM IST
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Reporting fair value: Streamlined valuations to boost investors' confidence

6 min read Last Updated :May 20 2024 | 6:42 PM IST
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$700 mn buyout deal shows new way of moving assets, holding equity in India

3 min read Last Updated :May 15 2024 | 2:09 PM IST
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PE firm ChrysCapital to invest up to Rs 830 crore in Centre For Sight

2 min read Last Updated :May 14 2024 | 8:16 PM IST
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Indian PE, VC investments decline 35% to $39 billion in 2023: Report

2 min read Last Updated :May 09 2024 | 11:01 PM IST
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Quadria Capital acquires minority stake in NephroPlus for $102 million

1 min read Last Updated :May 06 2024 | 4:53 PM IST
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ChrysCapital raises $700 mn to maintain stake in National Stock Exchange

1 min read Last Updated :Apr 30 2024 | 7:52 PM IST
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PE firm Advent International to invest $297 mn in Apollo Hospitals' unit

2 min read Last Updated :Apr 26 2024 | 10:02 PM IST
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India Inc to tap private credit to finance new projects, says PwC

3 min read Last Updated :Apr 24 2024 | 11:38 PM IST
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PE, VC investments decline marginally to $13.5 bn in March quarter: Report

2 min read Last Updated :Apr 19 2024 | 5:48 PM IST
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Investor climate group eyes assets in private equity, sovereign debt

2 min read Last Updated :Apr 18 2024 | 1:26 PM IST
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Investors spoiled for choice with top ice cream makers on table for sale

6 min read Last Updated :Apr 01 2024 | 12:36 AM IST
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Olympus Capital divests 9.8% stake in Aster DM Healthcare for Rs 1,978 cr

2 min read Last Updated :Mar 27 2024 | 9:28 PM IST
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PE firm Olympus to sell 9.8% stake in India's Aster DM for up to $234.5 mn

1 min read Last Updated :Mar 26 2024 | 6:53 PM IST
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PE, VC investments fall to $2.2 billion in Feb as big-ticket deals dry up

2 min read Last Updated :Mar 21 2024 | 7:12 PM IST
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Ananya Birla's Svatantra to get Rs 1,930 cr capital from Advent, Multiples

2 min read Last Updated :Mar 04 2024 | 8:18 PM IST
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Indian market too big to ignore: Beauty and make-up brand Laura Mercier

2 min read Last Updated :Feb 29 2024 | 10:06 PM IST
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