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Showing posts from April 3, 2011

Private Equity - Leverage Buyouts

What is Private Equity? Private equity is an asset class that has evolved substantially in the last couple of decades.   It is an alternative investment strategy that involves investing in privately held companies.   The key feature is the private nature of the securities purchased.   Investments in private equity are illiquid. Investors in this marketplace must be prepared to invest for the long-haul; investment horizons may be as long as 5 to 10 years.  Private Equity Partnership Structure The predominant organization form of private equity investing is the limited partnership structure.   Limited partnership consists of limited partners (LP) and general partners (GP).   The LPs of the partnership are the investors, i.e., the main providers of capital.   These are typically wealthy individuals, endowments, pension funds, and other institutional investors. The GP of the partnership are responsible for the day to day management of the partnership’s investment, as well as gener

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