Definition of Private Equity
What is Private Equity
Private equity is the capital invested by an angel investor, venture capital firm, private-equity firm or other specialized firm for an equity stake in a company that is not on a public exchange. A private equity firm is responsible for identifying the targets, deal flow and execution, and portfolio oversight.
Private Equity Investment Strategies
Private Equity Investors
A private-equity manager uses the money of investors to fund its acquisitions. Some of the investors could be hedge funds, pension funds, university endowments or other accredited investors.
The private equity firm is responsible for maximizing the value of the portfolio and in return, they earn an annual management fee and a performance fee. A common fee structure in the industry would include a 2% annual management fee and a performance fee of 20% of the gross profits on the sale of a company in the portfolio but incentives can vary widely.
Benefits of Private Equity
Some of the advantages of private equity are easy access to alternate forms of capital for entrepreneurs and less concern over near-term quarterly performance. These advantages are offset by the fact that private equity valuations are not set by market forces so there can be discrepancies over the actual value.
GlobEx Markets Financial Dictionary of Terms, Phrases and Concepts
The GlobEx Markets financial dictionary is a reference resource that provides the definitions and explanations of various financial terms, phrases and concepts that are used in international finance and global investing. It includes a broad range of financial terms, such as those related to stocks, bonds, currencies, commodities, options, futures, crypto and much more.
A financial dictionary can be useful for anyone who wants to learn more about finance and investing, or who works in the financial industry. It can help clarify the meaning of technical terms and the language used in financial publications, reports and other sources.
Benefits of the GlobEx Markets Financial Dictionary
There are several benefits to using the GlobEx Markets financial dictionary, including:
- Clarifying Technical Terminology: The financial world is filled with complex terms and language that can be confusing to those who are not familiar with it. A financial dictionary can help clarify the meaning of technical terms and make them more understandable.
- Improving Financial Literacy: By learning the meaning of financial terms, phrases and concepts, you can improve your overall financial literacy and gain a better understanding of the workings of the financial world.
- Enhancing Communication: A financial dictionary can help improve communication among financial professionals by ensuring that everyone is using the same terminology, phrases and concepts.
- Supporting Research: When conducting financial research or analysis, a financial dictionary can be a valuable resource for identifying and understanding key terms, phrases and concepts.
- Facilitating Decision-Making: Understanding financial terms, phrases and concepts can help you make better-informed financial decisions, whether you are managing your own finances or making decisions on behalf of an organization.
Overall, the GlobEx Markets financial dictionary can help improve your understanding of international finance and global investing. It is a valuable tool for anyone who works in the financial industry or who wants to improve their financial literacy.