B E N C H M A R K I N T E R N AT I O N A L
BUSINESS AND INVESTMENTS: UNDERSTANDING PRIVATE EQUIT Y
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BU SI NE SS AND I N V E STMENTS: UNDERSTA NDING PRIVAT E EQUITY Private equity is a form of capital investment made into private companies, as opposed to firms that are publicly traded.
A private equity firm raises money from investors. The PE firm then uses these funds to invest in different assets, for example investment into a company. The potential returns for private equity investment can be higher than those from investment in the public equity markets.
DIRECT INVESTMENT Private equity involves investing directly in companies. Many private equity funds choose to invest in this way to gain a level of control over operations. By staking a claim in the company, private equity funds gain a say in how the company is run.
H I G H C A P I TA L As private equity funds typically want a controlling stake in companies, the minimum threshold for investors is high. Minimum entry requirements can range from around $250,000 to several million dollars. For this reason, most PE funds are only open to accredited investors.
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MINIMUM ENTRY REQUIREMENTS CAN RANGE FROM AROUND $250,000 TO SEVERAL MILLION DOLLARS. FOR THIS REASON, MOST PE FUNDS A R E O N LY O P E N TO ACCREDITED INVESTORS.
Management structures and operational strategies may be changed as a way to generate more money for shareholders.
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More information about private equity deals in 2021 can be found by visiting the blog of Benchmark International.