Private Equity – Way to Get Money for Business |
Posted: April 28, 2021 |
Unlike bank loans, private equity funds or FCP deliver the money that businesses or ventures need and get involved in the particular needs of each company in which they invest to add value. Private equity is one of the investments that have taken the most significant relevance in recent years globally, mainly due to investors' appetite for greater sources of return. Venture capital or private capital is money contributed by professional investors who invest, with a long-term vision, in the capital of companies with excellent growth potential. The company's management team and participate directly in the corporate governance bodies and in the management of the companies they finance. The main objective of using private capital is to significantly increase the value of the companies in which it invests. Private equity focuses on financing new companies, recently created or in special situations that do not have the size, assets, or operating history to access traditional financing markets. A private equity fund is a financial intermediary that draws resources from professional investors to allocate that money to various private companies or projects with high growth potential. A private equity fund contributes resources to companies and projects that have high growth potential. With those resources, together with the active participation of the fund to define the strategy, in the implementation of corporate governance, the company can execute a business plan that allows it to grow in an accelerated way. In addition to acting as financing providers, venture capital firms become strategic partners and advisors to the companies they invest in. That is, they are directly involved with the administration to ensure the success of their investments. Private equality is considered smart money, since in addition to contributing financing. It provides strategic, operational, financial, and legal advice and commercial and financial contacts. The silver lake private equity is usually set up as investment funds that raise money from institutional and individual investors. They then channel to the companies in which they invest in exchange for a stake in their capital. Private equity investments are divided into four large groups, depending on the size and level of development of the companies in which silver lake private equity invest:
Winding Up Other private equity investment strategies include financing projects that involve the purchase of 100% of a company, generally in leveraged transactions known as buyouts; the financing of companies in operational or bankrupt restructuring, known as distressed assets.
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