STRATEGIZING EQUITY

We all know that private equity investment is like an umbrella where investments are made in different types of private companies. These private companies come up with different types of risks and offer different types of returns. Although the umbrella covers a wide number of firms, investment stills calls for the need of strategies while investing in private equity because you don’t want to bet all your hard earned money so casually. PE funds in India comprise of various stages of investment which require smart selections. Some of the elements of private equity strategies are as follows:
STRATEGIZING EQUITY By Everstone Capital


•    Stage of investment: It is based on how long has a company been in the industry. You must have heard of the IPOs (Initial Public Offerings) generally known as venture capital. And then there are buyout companies which are mature companies and are generating cash flow already.

•    Geography: It is based on what geography to target while investing in private equity. A fund can be country specific i.e. focusing on one country or it could focus on two or more countries as well. Similarly a fund can be region specific as well, these are funds which focus on one region entirely, for example, Middle East. The distinction can also be made whether funds focus on emerging markets or developed markets (I know you thought of US while thinking of developed)

•    Sector: Just like funds are distinguished on the basis of geography, PE funds can be made in a broad range of sectors, such as real estate India, energy sectors of India, health, manufacturing, media, retail, consumer products etc.

•    Value Added: Every firm adds some value to its portfolio companies (or at least tries to) which could be of different types. Examples of such added values are operational expertise, strategic expertise and streamlining expertise. This results in the addition of new customers and suppliers.

A private equity well strategized according to the needs would be of great value.

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