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Private Equity Funds - Essay Example
Finance & Accounting
Pages 6 (1506 words)
Private Equity Funds.
Private Equity is the source of capital that is raised outside the public equity market in order to make investment in any asset or organization (Yong, 2012)…
These types of funds have huge difference from the other investment funds from the perspective of the business strategy used for seeking control over the businesses where they have invested (Cumming, 2009). These types of funds are also different in their structure because they are generally close-ended and have finite life time. The private equity funds have fixed number of shares. Private Equity Firms Nowadays, the leveraged buyout investment companies are referred to as the private equity organizations (Stowell, 2010; 2012). These types of firms are different from the venture capital firms which invest in emerging and young companies and as a result are not able to seek the majority control (Cumming and Johan, 2013). The emergence of private equity firms arose from the leveraged buyouts. The leveraged buyouts started during the 1980’s (Kaplan and Stromberg, 2009). The leveraged buyouts had increased rapidly in this decade and gradually the leveraged buyout companies became dominant corporate organizations. The private equity firms have been defined as the decentralized organizations with relatively fewer numbers of employees and investment professionals. Big private equity firms are larger in size but smaller than the firms where they make the investments. The funds raised by these private equity firms are known as the private equity funds. ...