The Dhanush Iyer Blogs

Let's understand what Private Equity firms essentially do and get a grip on the process. Private Equity firms are nothing but firms that take money from a bunch of rich people and invest in late-stage companies, securing a majority stake in them. Let's dive into more detail. Institutions like endowment funds and pension funds, with huge funds at their disposal, aim to diversify their investment portfolios. They entrust this money to fund managers who then raise funds from a bunch of these institutional investors. This capital is used to buy out a significant stake in well-established companies that aren't listed on the stock exchange. Life cycle: 🎯 Formation - Initially, one or more fund managers work on creating the limited partnership structure needed for the fund. They develop the fund's strategy and ensure compliance with all required regulations. This step takes a few years on average. At the end of this stage, the fund has been established. Oh, by the way, a limi...