(Source: British Venture Capital Association)
The word, 'private equity' means the equity financing of unquoted companies at many stages in the life of a company from start-up to expansion. Private equity covers the following:
And also
Private equity is invested in exchange for a stake in a company and, as shareholders, the investors' returns are dependent on the growth and profitability of the business. The key elements of private equity are:
The private equity industry has been an important contributor to UK investment activity since the early 1980s. In the period from 1984 to 2001, almost £50 billion has been invested in over 23,000 companies. The UK private equity industry continues to be the largest and most developed in Europe, accounting for 29% of total annual European private equity investment in 2001. This compares with the next largest industries of Germany, accounting for 18%, and France (13%).
Since 1984, the amount invested by the industry totals just under £50 billion in more than 23,000 companies worldwide. Over the period, nearly three-quarters of investments have been into start-up and expanding companies. Of those UK businesses invested in, 56% received amounts of less than £1 million. As one can see from the chart below, private equity firms are a crucial source of finance to growing businesses.
(Source: British Venture Capital Association)
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Last modified: 03/03/2004 09:18:58