Sunday 16 August 2009

Private equity path to India

The holy grail of the private equity fund is a small, relatively unknown and unlisted firm that has big growth potential.

Find one, buy a strategic stake at a rock-bottom price, restructure, make it grow and then sell out at a huge profit. That is the abiding fantasy that drives the private equity fund manager.

Private equity funds are private pools of capital that seek above-average returns. Not for them are the passive investment in an established company; they want managing stakes in small companies with a view to enhancing their value.

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