Private equity is one of the fast growing part of investment world, it reached to almost 17% of the total US GDP and still growing. The reason for this growht is the high profitability of this type of investment on the companies which are still private and fund can acquire them with the aim of selling those stocks later in an IPO.
1. IT industry is shaping the future of the world, has an amazing profit margin, Saas is
getting bigger and bigger every year and we predominantly focused on Private companies
in IT sector.
2. The time horizon for a PE to be really profitable is minimum 5 years, so after 5
years time we start evaluating different exit strategy based on how much growth the
company made so far, how much more value it will generate if we stay in it, and what are
the market conditions, like if there is a negative sentiment in the overall market it's
best to wait to maximize our profit. The exit strategy normally can be either selling
our share to a bigger PE firm or going through IPOs.
One of the most lucrative PE exits in 2020 came from Providence Equity's sale of their
stake in Zenimax Media, a game developer. The firm sold its stake, which it acquired in
2007, to Microsoft for $7.5 billion, not bad considering their initial investment was
just $300 million, means %2400 profit in 13 years ! Definitely they couldn't reach to
this return if they wanted to sell their stake in early years.
3. This is a close ended fund means when we identify a deal, we raise money from our
investors to make that deal and then we should wait and give time to that company grow
enough during at least 5 years time and then we sell it with a great profit margin. So
for every 1 of the deals we found we repeat this cycle and the exit time as already
described is at least 5 years later.
4. Normally there is a 2% industry standard management fee which funds charge from their
asset under management. This fee is to cover the running costs of the funds like high
salary of top analysts working on the fund, infrastructures , IT systems, buying data
softwares and reports, deal sourcing and legal fees etc...
Currently as a promotion our PE fund is charging only 1% and cover the rest of the costs
by itself. This offer can be changed anytime in the future.
5. Your risk / reward: Risk is medium to high in Private Equity type of investments, as
it's solely based on the operational activity of the company we purchased, but returns
are high as well normally up to 5 times of the initial investment. When we sold our
share of PE, the profit will be divided 25 to 75 between us and our investors, which
means you will get 75% of the generated profit.
6. Participating in the fund is strictly by application only. After you fill the
application, one of our expert team will be in touch to assess your situation and see
whether this investment is suitable for you.
© 2021 - All Rights Reserved