Private equity firms pool together investment funds and use these funds to purchase companies. They then implement managerial and operational changes, and sell the companies for a profit. Often these transactions involve large amounts of debt, which is serviced by the revenue generated from the purchased company. The industry generates revenue through fees for managing the funds. Revenue may also include a capital gains component.
The global financial crisis put an end to cheap credit conditions and consistently rising asset prices, resulting in substantially reduced private equity activity.
Private equity firms manage investments in private companies. They may raise funds from external investors and invest on their behalf, or invest the firms’ own funds, or a combination of the two. Investments can include venture and growth capital for emerging companies as well as buyouts, including purchases of publicly traded companies to take them private. Firms earn revenue from management fees paid by outside investors, and from gains made on investing their own funds.
The report covers the scope, size, disposition and growth of the industry including the key sensitivities and success factors. Also included are five year industry forecast, growth rates and an analysis of the industry key players and their market shares.