Private capital

Private capital


Private equity is medium to long-term financing provided in exchange for an equity stake in unlisted companies with high growth potential. Private equity isn’t new—it’s been around in various forms for nearly 25 years, including the Barbarians at the Gate-style hostile takeover of RJR Nabisco by Kohlberg Kravis Roberts (KKR) in 1989. Private equity is booming, with buyout firms poised to raise more than the previous record of $215 billion set in 2006. PE is a broad term that generally refers to any type of non-public equity securities that are not listed on a public exchange. PE is very much a ‘people’ business and the investment professionals involved and their interaction as a team will be key to determining fund returns. Capital is typically accessed by companies that do not have the operating history or experience to access lower-cost capital alternatives, but need capital for growth or expansion. This capital is neither a silver bullet nor a dark force.


Foreclosures rape the public markets. Buyout groups are just like the old conglomerates. Buyout generated a growing share of private equity investment by value, increasing from one-fifth to more than two-thirds between 2000 and 2005. Buyout and real estate funds have performed strongly over the past few years relative to other asset classes , as public stocks, surely a factor in the massive fundraising that both have enjoyed recently. The Redemptorists, who were kings of the hill and masters of the universe, were suddenly seen as normal people.


European venture capital shows a steady increase in the number of successful venture capital-backed companies and notable exits. European private equity fundraising crossed the 100 billion mark to reach 112 billion in 2006 alone, similar to the level of new capital raised through IPOs on European stock exchanges over the same period. European private and venture capital provides a vital source of funding for growing companies in all industry sectors. Funds focused on Europe account for 26% of the global total, while funds focused on Asia and the rest of the world account for the remaining 11%.

Black stone

Blackstone went public on June 22; its IPO, the largest since 2002, raised $4. Blackstone’s performance is even worse than that of Fortress Investment Group, a private equity and hedge fund manager that went public in February. Blackstone is the largest private equity firm in the world. Blackstone’s real estate holdings have done even better, up 29% annually since 1991. Blackstone set a record in 2006 by completing $101 billion in buyouts amid historic levels of fundraising and deals in the U.S. Blackstone, like many other private equity firms, has made much of its money in the business of buyout – acquiring undervalued public companies, using borrowed money, taking them private, improving them and reselling them at a profit. BLACKSTONE’S RECENT $39 BILLION acquisition of Equity Office Properties Trust showed that few deals are too big for this new breed of investor.


Investors in mutual funds include wealthy individuals, insurance companies, college endowments, and pension funds.


PE is responsible for 1 in every 5 dollars spent. Private equity is an investment asset class describing private investments in private (as opposed to publicly traded) companies. Equity is a preferred asset class for professional managers because it has produced superior returns in the past. PE is interested in the long-term performance of the company.

#Private #capital

Leave a Comment

Your email address will not be published. Required fields are marked *