Private equity https://partechsf.com/partech-international-ventures/ firms invest in companies that are not listed publicly and then attempt to grow or transform them. Private equity firms raise funds in the form of an investment fund that has a predetermined structure, distribution system and then invest it into the companies they wish to invest in. Investors in the fund are referred to as Limited Partners, and the private equity firm is the General Partner responsible for buying and selling the targets to maximize returns on the fund.
PE firms are sometimes criticized as being ruthless in their pursuit of profits However, they typically have extensive management expertise that allows them to increase the value of portfolio companies by implementing operations and other support functions. They can, for example guide a newly appointed executive team by providing the best practices for financial and corporate strategy and assist in the implementation of more efficient IT, accounting, and procurement systems to lower costs. They can also increase revenue and identify operational efficiencies that can help them increase the value of their assets.
Private equity funds require millions of dollars to invest and they can take years to sell a business with a profit. In the end, the industry is highly illiquid.
Working for an investment firm that deals in private equity typically requires prior experience in finance or banking. Entry-level associates work primarily on due diligence and financing, whereas junior and senior associates are focused on the relationship between the firm and its clients. Compensation for these roles has been on an upward trend in recent years.