Queries
Hello to all, I am doing MBA at Surat and want to specialize in Finance. I am confused with term Private Equity. As much as knowledge I have it means Venture Capital Financing. But I am not fully confident about that. Therefore, share your knowledge to clarify my this doubt. :?:
Thanks,
vijay

18th July 2007 From United States , Columbus

PARTICIPATING IN DISCUSSION:
Deepak Thukral
Manager Accounts
Parthiv20
M.b.a Fin Student
Master01
Lender

Hi Vijay
When a company offers to issue shares to the public, it is called an IPO. As opposed to this, when a company offers to sell the shares to private funds or investment bankers or venture capitalists, it is known as private equity.These shares are not listed in the stock exchange since they are not public offers
Generally, Private equity funds are the pools of capital invested by private equity firms. Categories of private equity investment include leveraged buyout, venture capital, growth capital, angel investing, mezzanine capital and others
Swarnalata
19th July 2007
vijay actually there is thin line between private equity and venture capital.private equity players check the fiasibility of the project once u give u proof then they will invest in your project.e.g l&t started ship building project in hazira which is fiasible and u have proof of suceess in this project that is private equity.while in venture capital with out the fiasibility or suceess they invest in your project like naukari .com initially no one knows it is big suceess so with out proof of sucess those invested in project and taking more risk are called venture capitalist
21st July 2007
WHEN A PROJECT IS EVALUATED BY A FINANCIAL CORPORATION, IT IS USUAL TO COME TO AN AGREEMENT BETWEEN THE CORPORATION AND THE FINANCIAL COLABORATOR THAT THEY WILL PARTICIPATE IN THE EQUITY OF THE COMPANY IN A CERTAIN RATIO. FOR INSTANCE IT IS AGREED THAT THE FINANCIAL INSTITUION AND THE PROMOTERS WILL CONTRIBUTE EQUITY IN THE RATIO OF 49 BY THE INSTITUTION AND 51 BY THE PROMOTERS. THEN THE PROMOTERS ARE AT LIBERTY TO INVEST THE ENTIRE AMOUNT THEMSELVES OR AS AN ALTERNATE THEN CAN ARRAGE THE EQUITY FROM THEIR ASSOCIATES BY ALLOTING SHARES TO THEM. THIS IS CALLED PRIVATE EQUITY. IN THE PRIVATE EQUITY THE PUBLIC AT LARGE DO NOT PARTICIPATE AS THE COMPANY IS NOT LISTED ON AND ITS SHARES DO NOT QUOTE ON THE STOCK EXCHANGES
DEEPAK THUKRAL
CHANDIGARH
21st July 2007 From India , Chandigarh
Private equity (which is sometimes referred to as “buyout investing”) involves the purchase of a majority or complete ownership stake of an operating company, which is either privately-held or listed on an exchange. Generally, these companies have been in existence for five or more years.
The purchase typically has a small equity investment (from 5% to 20%) and a large amount of debt. The debt will usually include a mix of bank loans, notes and bonds.
For more info follow the link.........
http://www.bloggingbuyouts.com/private-equity/
27th July 2007
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