Private Equity Decoded For The Layman
Begin a sentence with ‘private equity funds in india’ and you’d be sure to lose me. Simple words, but the very words throw me into a frenzy of confusion. What is private equity? What are private equity funds?
Well, after a bit of extensive research, I’ve laboriously decoded the inner workings of private equity, funds, and all.
So, here’s what I’ve gathered. Private equity is essentially a form of investment. The reason ‘private’ comes into the picture is because private equity basically refers to investments made in private companies, or companies that will eventually go private as a result of all such private equity transactions. Now, coming to ‘equity’, it refers to the value of the shares issued by a company. So put the two concepts together, the value of shares from private companies…. And voila, you’ve got ‘private equity’! So, what are private equity funds in india all about, now that we’ve decoded what private equity means?
Private equity funds relate to the process of wealthy individuals or companies investing and acquiring equity ownership in private companies. Seems straightforward, well, it is and it isn’t. To the layman it’s all gibberish, while Wall Street could process private equity in their sleep! So, partners at private equity firms raise private equity funds and manage them so as to yield favourable returns.
Now, upon further inspection, I found that private equity funds can have either a general investment criteria or several arteries in terms of the particular industry that they’re investing in. For example, India Real Estate is one of the fields in which private equity frequently dabbles. What does this mean? It refers to channeling private equity funds into the real estate market –highly profitable, of course.
So there you have it! Private equity decoded for the layman!
Well, after a bit of extensive research, I’ve laboriously decoded the inner workings of private equity, funds, and all.
So, here’s what I’ve gathered. Private equity is essentially a form of investment. The reason ‘private’ comes into the picture is because private equity basically refers to investments made in private companies, or companies that will eventually go private as a result of all such private equity transactions. Now, coming to ‘equity’, it refers to the value of the shares issued by a company. So put the two concepts together, the value of shares from private companies…. And voila, you’ve got ‘private equity’! So, what are private equity funds in india all about, now that we’ve decoded what private equity means?
Private equity funds relate to the process of wealthy individuals or companies investing and acquiring equity ownership in private companies. Seems straightforward, well, it is and it isn’t. To the layman it’s all gibberish, while Wall Street could process private equity in their sleep! So, partners at private equity firms raise private equity funds and manage them so as to yield favourable returns.
Now, upon further inspection, I found that private equity funds can have either a general investment criteria or several arteries in terms of the particular industry that they’re investing in. For example, India Real Estate is one of the fields in which private equity frequently dabbles. What does this mean? It refers to channeling private equity funds into the real estate market –highly profitable, of course.
So there you have it! Private equity decoded for the layman!
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