Private Equity Funds

A private equity fund is an investment fund that pools money from many investors and invest it in private, non-publicly traded companies and businesses. Typically, private equity firms establish private equity funds and manage them as a general partner (GP). It also contributes certain percentage the fund’s capital to private equity fund and makes all of the fund’s management decisions.

Private equity fund raise the clients’ money and invest directly in companies, primarily by purchasing private companies. Generally, private equity funds acquire controlling interest in companies through share purchases. Once they acquire or control interest in a company, private equity funds look to improve the company through various decisions such as management changes, streamlining operations, or expansion, with the eventual goal of selling the company for a profit, either privately or through an initial public offering in a stock market. To achieve their aims, private equity funds usually have, in addition to the fund manager, a group of corporate experts who can be assigned to manage the acquired companies. A private equity firm may manage multiple private equity funds as well as a number of portfolio companies.

Generally, private equity funds focus on the long-term potential of the portfolio of companies they hold an interest in or acquire. So they generally have long term investment goals.

Different types of private equity funds •are Venture Capital, Buyout or LBO etc.