View source for Private equity investments

'''Private equity''' is a form of medium to long term [[financing]] of private firms that are not yet listed on stock exchange. Private equity [[money]] can be used to establish a [[company]], expand its operations, repurchase all or part of an existing business in collaboration with its [[management]] or to revive the company.

Acquisition of the Private equity money is very different from raising loans from various lenders such as banks. Lenders have the right to [[interest]] and repayment of principal amount, regardless of success or failure of the [[project]]. The financing of the Private equity is obtained in exchange for shares in a company and investors' profits depend on the company growth and profitability.
 
==Forms of private equity funds==
The concept of Private equity is composed of three segments of capital [[investment]]:
* '''[[Venture capital]]''' - is an investment in new, private [[enterprise]]. The main objective of those involved in this type of financing is to help growing businesses in the difficult period of "maturation".
* '''Buyout capital''' - consists of the buyout, in cooperation with existing or new management, of part or all of an existing business. To carry out the transaction companies generally use a significant amount of debt capital
* '''[[Mezzanine capital]]''' - is a major provider of capital for further development of projects previously funded by Venture Capital. Usually with it is the case when not fully matured company [[needs]] additional funds in the form of credit, and banks are still reluctant to grant it

==Benefits of private equity capital==
* Companies funded by the Private equity generally grow faster than companies without such forms of support. This is possible through a combination of capital and expertise contributed by the investors.
* Private Equity allows you to realize the ambitions of the founders of the company and provides stable conditions for making [[strategic decisions]].
* The overall objective of investors is to increase the value of the company.
* Private equity funds often operate in conjunction with other financial institutions and can assist in obtaining all necessary funding for the project.
* Thanks to funding by the Private equity company [[need]] not to publish reports on the planned [[profit]] (the need exists, when the company raises capital through the stock exchange).

'''See also:'''
* [[Primary market]]

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==References==
* Arundale K. (2003), ''A Guide to Private Equity'', [[Price]] Waterhouse Coopers, London
* Bierman H. (2003), ''Private Equity Transforming Public Stock to Create Value'', John Wiley & Sons, New York
* Kaplan, S. N., & Schoar, A. (2005). ''[http://dspace.mit.edu/bitstream/handle/1721.1/5050/4446-03.pdf Private equity performance: Returns, persistence, and capital flows]''. The Journal of Finance, 60(4), 1791-1823.
[[Category:Financial markets]]
[[Category:Strategic management]]

[[pl:Private Equity]]