An Overview Of Investing In Private Equity

Posted by JacobAiden2523 on December 24th, 2015

This article has been written to provide an overview of private equity and its benefits. It also deals with how to look for a private equity advisor in London.

First of all, let’s us discuss what private equity is. Investopedia has below-mentioned definition of private equity:

“Private equity is a source of investment capital from high net worth individuals and institutions for the purpose of investing and acquiring equity ownership in companies.”

As the investments made through private equity are huge, high net worth individuals don’t make investments without the help of firms that understand all the nitty-gritty of this domain. These firms are known as private equity firms. They manage private equity funds. As a rule, private equity firms cannot hold publicly-traded securities. Instead, they usually look for equity stakes, which is known as partial ownership, in private companies. Also, such firm can invest in so-called private placements of securities from public companies. The securities that are privately placed are not offered to the general public, so they are not traded in the public securities markets.

The main function of partners at private-equity firms is to raise funds and manage investments to provide better returns for shareholder clients. Its investment horizon is typically between four to seven years, though that can vary. Private equity ownership has many advantages. Some of them are mentioned below:

There is a wide horizon for the investment in private equity. So, you will have numerous opportunities  of investment.

Private equity firms are very selective and do lots of research when it comes to assessing the potential of the companies to understand risks and how to avoid them. So, you can rest assured for your investment.

Investment in private equity firms is more transparent and accountable. As a private equity investor, you can dictate terms more easily, and you can hold management accountable to performance targets and milestones.

Considering these benefits, it is a wise decision to invest in private equity. However, you should make sure that you get a reliable private equity advisor in London on your side so that your investment can be directed to high-yielding companies. You should look for a firm that does thorough research in order to address a wide range of issues that investors may encounter when they make investment decisions. So, now, what are you waiting for? Look for a private equity firm right away to make investments in private equity.

Author Bio:
The author is working as a freelance writer. He has written many articles and blogs on various topics related to private equity.