Stages In Private Equity Investment

Private equity is the investment made in private companies or publically listed companies which becomes private as a result of investment  by firms or individuals. An investment in private equity fund PE can be a very safe and beneficial way but that requires a proper strategy in order that it proves to be fruitful. The strategy is planned in various stages which can be planned according to the situation a company is in. The planning is done in stages like the target companies, The sectors for investment, the target geographies, The sectors for investment, and the Added value to the firm. 

Private Equity Fund
Real Estate India


Types of equity:

a)Venture capitals - This type of investment is done in the companies and product which are promising for future and require an investment in the company.

b) Growth equity – It is an investment in private equity so as to develop the business to new verticals and expand the growth of the company. This is generally done in growing companies which have gone through its basic phases.

c) Buyouts and distressed investing - These are the stages of investment where firms earn more money. Distressed companies are bought out with some investment from firms and some from loan from banks which is paid back from asset liquefaction and cash flow out of the company.

The three major stages of strategy for a private equity firm are:

1)Fund’s Target Sector

Private equity firms have to realise the basics of investment and target the sectors which are about to grow most in the coming decade. The major sectors for the growth are healthcare, insurance and technology or real estate in India.

2)Value Added by the Firm

The firms are an existing business organisation in themselves which can guide a new company with its business development. A particular expertise in any field of the firm helps it decide the speciality of the sector they want to invest in.

3)The geographical target:

The firms have to realise that what part of world is most suitable for the type of business they are investing in.The technical companies need to be in big cities while the investment in tourism has to be in the suburbs. The fim which decides upon this swiftly is a profitable organisation.

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