What is private Equity?
Private equity provides long-term, committed share capital, to help unquoted companies grow and succeed. It is a source of funds if you are looking to start up, expand, buy into a business or buy out a division of your parent company.
Obtaining private equity is different from raising debt or a loan from a lender, such as a bank. Lenders have a legal right to interest on a loan and repayment of the capital, irrespective of your success or failure. Private equity is invested in exchange for a stake in your company and, as shareholders, the investors’ returns are dependent on the growth and profitability of your business.
Private equity in the UK originated in the late 18th century, when entrepreneurs found wealthy individuals to back their projects on an ad hoc basis. This informal method of financing became an industry in the late 1970s and early 1980s when a number of private equity firms were founded. Private equity is now a recognised asset class. There are over 170 active UK private equity firms, which provide several billion pounds each year to unquoted companies, around 80% of which are located in the UK.
We can advise you on the process of seeking appropriate private equity – whether this is from wealthy individuals (business angels) or from private equity houses. Our links with a range of professional advisers and private equity providers in this area will enable us to connect you to the people you need to speak to.