Some basics to know about private equity investment

Many people talk of private equity and its implications, but only a few understand what its actual meaning. Private equity basically stands for the equity that is valid only for private companies and cannot be traded publically. Due to regulations these equities cannot even be listed publically. Private equity funds are therefore made of several firms that invest directly in private companies or entities at varied stages.

Even foreign investors go for private equity investment in India for private equity funding and investing because investing in private and future companies with a stellar business and revenue model maximizes the return on investment. It is best to capitalize in growing companies that have the potential of making it to the Initial Public Offering.
Private equity firms are divided into two types on the basis of investment strategies- venture capital investments and leveraged buyouts. Let’s understand them in a bit more detail.



Venture capital investments: investors place their prime focus on maximizing ROI by buying shares of high latent in low maturity companies in new or less fragmented markets. Then they wait for the companies to either get listed or to liquidate for other cash commitments.

Leverage capital investments: The buyout firms are the ones that buy private firms of business units to utilize the situation and make money through it. Venture capital firms raise money by borrowing from a group of investors, but leverage buyout firms use dent financing. They only donate a fraction of proposed acquisition to maximize benefits and earn maximum ROI by leveraging the investment. 


Before you plan and start investing, consider contacting companies such as Everstone Capital that deals in private equity funds in India. You will be offered you in-depth guidance on private equity, real estate and hedge funding. Being a leading private equity group and real estate investment firm, it focuses on supporting the growth aspirations of entrepreneurs, corporations and asset owners across India and Southeast Asia. 

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