Private equity is a source of investment capital from high net worth individuals and institutions for the purpose

of investing and acquiring equity ownership in companies. Partners at private equity firms raise funds and manage these for the purpose of yielding favorable returns for their shareholder clients, typically with an investment horizon between four and seven years.

Private equity can be classified into following

Leveraged buyout (LBO) Venture capital Growth capital

It refers to a strategy of making equity investments as part of a transaction in which a company, business unit or business assets is acquired from the current shareholders typically with the use of financial leverage. The companies involved in these transactions are typically more mature and generate operating cash flows.

It is a broad subcategory of private equity that refers to equity investments made, typically in less mature companies, for the launch, early development, or expansion of a business. Venture capital is often sub-divided by the stage of development of the company ranging from early stage capital used for the launch of start-up companies to late stage and growth capital that is often used to fund expansion of existing business that are generating revenue but may not yet be profitable or generating cash flow to fund future growth.

It refers to equity investments, most often minority investments, in more mature companies that are looking for capital to expand or restructure operations, enter new markets or finance, a major acquisition without a change of control of the business.

It was after World War II true private equity investments began to emerge marked by the founding of the first two venture capital firms in 1946: American Research and Development Corporation. (ARDC) and J.H. Whitney & Company.

In India, private equity is reasonably young, dating back to the mid-1990s. Indian companies received almost no Private Equity (PE) or Venture Capital (VC) funding a decade ago. The environment heated up in the end of the 90s with the IT boom, with companies investing (and getting their fingers burnt) with their investments. This scenario began to change in the late 1990s with the growth of Indias IT companies and with the simultaneous dot-com boom in India.

Goldman Sachs Principal Investment Area The Carlyle Group Kohlberg Kravis Roberts TPG Apollo Global Management CVC Capital Partners The Blackstone Group Bain Capital Warburg Pincus Apax Partners