Private equity business cycle
Private equity is provided to help young business expand. A number of stages exist as the business cycle develops from stages of infancy towards maturity and transmission.
The secondary market provides investors with a solution to liquidate capital at an earlier stage of cycle. As a business develops and value is created, the demand for equity increases, driving asset value upwards.
Private equity as an alternative investment
Private equity investments in comparison to traditional equities present investors with the opportunity to capitalize on a unique return profile. Over time, private equity has proven to outperform public markets leading to explosive wealth creation for investors with a more aggressive appetite.
Driving global innovation
Whilst many investors prefer the apparent security of trading publicly held positions in established companies, private equity investors help to drive market innovation and in more recent years have been instrumental in the development of eco-friendly developments in the form of green energy development.
Furthermore, private equity funding helps small business to address much wider, global challenges that are perhaps often overlooked by more established corporations. Agriculture as a private equity sector continues to grow in the face of rising global food demands.
As the global population rises, food shortages are predicted to impact both the developed and emerging world. In this example, private equity provides investors with the opportunity to capitalize in rising demands whilst participating as a greater good for humanity.