After the buyouts, the private equity firms are able to manage the companies in to making profits, after which they are sold to other investors. The private equity firms do a financial refurbishment of the companies facing a crisis. The Private equity firms also rebuilt the financial structures so that the companies get the ability of becoming productive financially. The major aim of the private equity firms is to make substantial returns to investors and to make their profits from the capsizing companies (Cendrowski, 2011 p89). The Blackstone Group is firm that deals with private equity it is based in America in the New York state. The investment company has got interests in vital businesses across the world. Blackstone is one of the largest firms that deal in a leveraged buyout transactions. They also have an interest to the real estate sector more so the commercial real estate business. The company is able to buyout a failing company, restructure the management of the company, put in a few investors and then they are able to turn around the financial status of the company in remarkably little time. The firm will then take out profits in the form of commissions that are deducted for the management of the company, and they also charge a performance fee that they will use to quantify their profits. The Southern Cross Healthcare is among the top companies that provides healthcare to the United Kingdom community. The Southern Cross have specialized their health care to care for the elderly people and those suffering from mental health in the residential and long term nursing homes. The Southern Cross business is also specialized in offering health care services to people who are suffering from brain injuries, and psychiatric issues. The company owns more than one hundred and sixty homes. Southern Cross was faring well under the management of John Moreton until the buyout of West Private Equity and Health care investments came along. Blackstone acquired Southern Cross by a buyout that was done in 2004 for a tune of ?162 million. They operated more than one hundred and sixty two homes whereby a majority of the homes were leased. Blackstone then put down its management skills on Southern Cross and invested in the company to make it one of the best health care providers in the United Kingdom. They also managed to acquire the Nursing Home Properties which were put under Southern Cross; this increased the portfolio of Southern Cross and made the health care provider become the largest health care provider in the United Kingdom. Later in 2005, Blackstone also acquired the Ashbourne Group which they also included in to the portfolio of Southern Cross. This still increased the financial credibility of Southern Cross, and this was at the same time increasing the quality of the services that they were giving to the people. Blackstone acquired the Ashbourne group with the aim of increasing the quality of services to Southern Cross. So far, the management methods of Blackstone to Southern were being done correctly, and the company was raking massive profits to investors, and management of the company was also benefiting. Apart from the management and the investors benefiting, the society was getting value for their money in terms of the
Conclusion on Private Equity Name: Instructor: Institution: In the last few years, the industry and market for the private equity has grown sharply until it is nearly becoming a particularly strong market for innovations and enterprises. The money markets have been boosted by the private equity market in to becoming a market that is dealing with multi million pounds with several financial institutions joining the industry to make money…
This research will begin with the explanation of leverage buyout. An organization is often taken over by a particular firm involved in investment activities. These firms use a comparatively tiny portion of equity and a comparatively large portion of outside debt financing. This type of activity is known as leverage buyout.
In one instance the managers acquire all the equity of the company and in the other it does so with a small group of investors who set the previous managers to manage. These are referred to as management buy-out (MBO) and management buy-in (MBI) respectively.
Companies can receive private equity from retailers and institutional investors and the funds serve a number of purposes such as acquiring new technologies, increasing working capital, strengthening the balance sheet and making acquisitions in terms of assets and other companies (Gilligan and Wright, 2008, p.
In the past few years, significant change is seen in the percentage of women workforce in the corporate world and labor market. In 1961 only 29% women were participating in the work field, however, the time span of 35 years, this percentage has increased to 60%. In 1990’s women were seen especially concerned about their education and future career.
Conceptually, the transfer of any kind of property from one individual to the other is termed as a ‘gift’ in accordance with the legal propositions. The court usually determines the value of the gift on the basis of three elements that include the actual delivery of the gift, intention of the donor who is presenting the gift and the acceptance of the gift by the receiver1.
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). The funds raised from the private equity market are generally sourced from those investors who are known as ‘limited partners’ which are then assigned to the respective investments with the help of the fund managers (also called ‘general partners’).
Though these are distinct markets, some firms are active in both, shifting emphasis with market conditions.
The two principal economic appeals derive from the facts that the private market is informational inefficient and that successful investments can produce astronomically high returns (high enough to more than make up for a much larger number of failures).
Proceeds are shared approximately equally between the entrepreneur and the venture capitalist; the entrepreneur makes $1.75 million and VC loses $1.25 million. The venture capital fund’s payoff will be $1.75 million.
c) The venture capital fund’s
Accordingly as Halliwell (1997) portrays, equity continues to be wholly unaffected by any existing state laws, mitigating the prevailing rigors of common law. This allows courts to utilize existing discretion, when applying justice in
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