Different Stages of Private Equity Investment (2024)

Private Equity is broadly characterized as an Alternative Investment, and is budding slowly in India. So, Private Equity has 4 stages, namely Fundraising, Investment, Portfolio Management and Exit. Here, we would be elaborating on all the 4 stages mentioned above.

Fundraising in private equity is a complex and competitive process that requires a combination of strategic planning, effective communication, and a proven track record to attract investors and successfully deploy capital. Basically, Private Equity fundraising is a process through which Private Equity firms raise capital from institutional investors, HNIs, and various other sources to invest in private companies or assets.

Private Equity offers many Investment opportunities across various different strategies, one of the most common strategies would be Venture Capital wherein the focus majorly goes on early stage investment which is also known as Angel Investing. Other strategies include Buyouts (LBO), Distressed Investing (acquisition of debt or equity of financially distressed companies), Co-investing, Technology and Innovation.

Portfolio management is the art and science of selecting and overseeing a group of investments that meet the long-term financial objectives and risk tolerance of a client, a company, or an institution. Now, Portfolio Management in Private Equity involves actively managing a collection of investments made by a Private Equity fund.

Lastly, there are certain inflection points where the investors in Private Equity may prefer to take an Exit. These exit points may be major events that change the management composition of the business, or may have a significant impact on the operations of the company. LBOs, Management Buyouts, Trade Sale, Mergers and Acquisitions etc. are some influential events in a business that can be considered exit points in a business.

Since Private Equity is a growing market, it carries a huge scope for financial growth along with the risks that come with this potential. AQT Direct Limited is moving towards growing the awareness of this budding segment and is actively helping people invest in them and ultimately grow their wealth.