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The usual safe bet of earning income is by working for someone or yourself. Working to earn money is just one way. Another way to make the dough is by letting money work for you. That is, growing your fortune by investing money in assets whose value appreciates over time. Although income is the starting point of investment, having an additional income stream helps at the time of crisis such as loss of a job, or for a secured retirement.
Having charge of the financial security, a backup source of income is never a bad idea!
As discussed in our previous blog, the COVID-19 threw financial markets into a tizzy. But volatility is the second nature of financial markets. As we get accustomed to the ‘new normal’, private equity funds remain a good option for judicious investments. According to Warren Buffett, Benjamin Graham, Peter Lynch, and other legendary investors, it is never late to start investing. So better get going!
For starters, here’s a little primer on things you need to know. This blog also features our collection of well-researched templates. Feel free to incorporate them into your learning process.
What is a Private Equity Fund?
Businesses raise capital in two common ways, debt, and equity. Equity is the value a company would return to its investors after its assets are liquidated, or debts are paid off. Equity is of two types - private and public. All companies start with private equity, or PE, and pay the investors through distributions as they grow. Businesses utilize the capital called private equity funds, invested by retail and institutional investors to bolster balance sheets, make acquisitions, fund R&D and technology, and other operations.
In private equity funds, limited partners own a significant percentage of shares with limited liability and general partners who own a small percentage share and full liability for managing the investment. Starting as private equity owned by individuals, companies get a knack for the various financial and legal procedures, giving the management a scope to juggle equity distributions with an objective to go public in the future. When the company goes public, through an initial public offering (IPO), the shares get listed on the stock exchange for the first time. The shares are then available to the public and are called public equity funds.
Types of Private Equity Fund
In this type of private equity, a combination of investors’ funds (equity) and leverage (debt) from different lenders is acquired by the company. By investing as little of their own money as possible, leaning on the loans, a private equity company can facilitate acquisition with large companies that show predictable returns. This type of private equity involves high risk, but assuming the business plan goes as planned, the private equity company can achieve a high return on equity (ROE) and internal rate of return (IRR).
Venture capital is a type of equity in which investment is done in startups with great growth potential and limited access to the financial market. Startups benefit greatly from this private equity for their expansion and creating a firm foundation in their niche. From investors’ perspective, a wise investment in a budding venture can yield extraordinary returns.
10 Best Templates to Download
The world of investing is interesting if one starts off with the right knowledge. Therefore, SlideTeam professionals have designed the 10 best private equity fund templates to help you make a well-informed investment. These templates are easy to download and customize. Let’s check them out.
Explain the two types of private equity to your audience by introducing this pre-designed private equity fund complete deck. Discuss the business framework and various information using this comprehensively-researched template. Moreover, showcase the entrance strategies using our content-ready template.
Demonstrate the benefits of investing in equity funds by downloading our attention-grabbing equity funds template. Comprising 12 high-quality infographic templates, this complete deck comes in handy to present a detailed insight into equity funds.
Present the executive summary and highlights of your firm using this professionally-designed private equity template. Using this complete deck, you can present the financial balance sheet and the goals of funding. As this template is editable, you can modify the content as per the business needs.
Highlight the planned growth strategy and have a useful brainstorming session by employing our private equity fund template. Discuss the shareholding pattern and exit strategies with your audience in a lucid manner using this pre-built template.
Illustrate a private equity firm’s structure and highlight partner information by incorporating our amazingly-designed private equity fund template. Startups can employ this contemporary template to explain the mechanism of private equity to potential investors.
Finance students can introduce this detailed private equity fund template for their projects. Financial analysts can incorporate this template into their presentation to discuss the structure of private equity firms. Additionally, mention the key highlights in this editable template.
Showcase the management and ownership of private equity by downloading our ready-made business template. Give a comprehensive overview of the private equity industry by introducing this professionally-designed template.
Demonstrate the structure of a private equity fund and showcase your expertise by downloading this striking template. This impactful template is useful for educational purposes.
State the terms of investment in private equity using this attention-grabbing finance template. You can elucidate the stats of company evaluation by using this infographic template.
Highlight the components of private equity using this editable business template. This pre-designed template can impressively present the data with just a few tweaks.
Financial security comes from promising returns, and hence, investing early on is highly recommended. Private equity funds are among the many investment options that can be elucidated using our templates. So utilize these templates to plan out investments with lucrative returns.