B E N C H M A R K I N T E R N AT I O N A L
FINANCE: EXPLAINING PRIVATE EQUITY
EX PL AI NI NG PRIVAT E EQUI T Y
Benchmark International
Private equity is a form of alternative investment in which investors typically bring capital to a private company, with a view to growing that business.
2
This capital can be used for multiple purposes, including introducing new technologies and product lines, opening new offices and factories, or expanding geographically.
P R I VAT E COMPANIES Private equity investment only occurs in privately-owned companies, not those that are publicly listed. However, private equity investment may be sought by a business seeking the necessary capital to pursue an exit strategy, which may include an Initial Public Offering.
Private equity is almost always a longterm investment, as the nature of the investment is to provide a company with enough capital and time to grow and generate more revenue. Many private equity investments have minimum holding periods to ensure investment objectives can be met. Private equity financing is often sought by companies looking to implement unorthodox growth strategies, which may require more time to see results.
P R I VAT E E Q U I T Y INVESTMENT O N LY O C C U R S I N P R I VAT E LY - O W N E D COMPANIES, NOT T H O S E T H AT A R E P U B L I C LY L I S T E D .
Benchmark International
LONG-TERM INVESTMENT
3
To f i n d o u t m o r e a b o u t s e l l i n g a b u s i n e s s to a private equity fund, visit the blog of mergers and acquisitions specialist Benchmark International.