Why Invest In Private Equity?

Investment in private equity funds is very common these days. There are a number of reasons for it. These reasons are less related to making fast money and more towards long term returns and benefits. If we look at the private equity investments done nowadays, more that forty per cent of it are in the form of pension funds. Next in the list are endowments and foundations. All this indicate that people are more interested in making long term investments, to preserve their capitals and minimize chances of any risks.

One of the top reasons why investors choose private equity funds in India is the large pool of opportunities that are available for investment. This is because the majority of companies come under private ownership. An investor may get a chance to unlock the hidden value of a private company by investing in it. Also, when one works with a private company for investment in equity funds, it gives him a chance to work directly with the management, unlike in a public company, where the investor’s role is passive. Private equity firms play a very important role in the companies they invest in. They step in all crucial financial decisions and use their experience to make the best decisions that will help the company in the long run.

Another benefit of investing in private equity is that unlike public companies, private equity firms do not aim to outperform every quarter. In contrary, they look for long term horizons and plan for future investments. At times, they may lose money in the initial years and then make it over in the long run. Private equity firms are generally more patient and they wait for the right time to invest in new opportunities. In India, it has been seen that people prefer investing in real estate private equity funds to avoid any hassles and gain long term benefits.