What are Leveraged Buyout Funds?

Private equity is an alternate investment class that deals in private investment rather than on a public platform. Where the stock markets deal with shares and bonds on a public level, meaning that they can be bought and sold by the common people. Private equity is an equity investment in companies that are non-listed towards the growth and development of that particular organization.

There are also firms like Everstone Capital and more that are investors in the area of private equity and work as middlemen for organizations or individuals. These firms with their team of experts will find the perfect place for one to invest their money in. Now in the sector of private equity, there are several varied types of fund involved. In some cases these funds are in regard to a specific type of industry, where others might work in certain kinds of geographical conditions only. 

One of these private equity funds, that are commonly known are the leveraged buyout funds. A leveraged buyout essentially means to acquire another organization by using a sizeable amount of money, borrowed from loans or bonds, to reach the acquisition cost. The reason behind these buyouts is that it lets companies to have big acquisitions without having to shell out a lot of capital.

In this type of private equity funding, sort of like a mortgage, one uses only a small portion of their own capital and the rest comes from borrowed capital. With this funding, a majority or the entire of the controlling stakes are bought over by one company or the company might partner with one or two private equity firms. This type of funding is good when a company needs to acquire another company but does not want to put in a lot of their own money to make the acquisition.