Types of private equity investments

Often referred as “family of alternative investing methods” by most business leaders, private equity is a bit complex and multidimensional topic to understand. It typically includes leveraged funds, growth equity funds, venture capital, and many other type of special situation funds.  

The private equity funds in India can be industry specific or can have a focus on specific geography. Let’s dig this subject a little deeper and find out the different kind of private equity funds. 



Venture Capital Funds: These funds can be further divided into two sub-types—early stage funds or later stage funds. Venture capital investment involves acquiring minority stakes in growth sectors like healthcare, bio-tech, internet, and energy. The basic motto of venture capitalist funds is recruiting the right people, professionalize various corporate functions, and make the functions of the company much more streamlined.  

Growth equity funds: These funds involves investment in more mature markets who are looking to upscale their operations and day-to-day business procedures. Contrary to the venture capitalist funds they invest more broadly and are target specific. More or less, growth equity funds can be seen as a bridge between venture capital and private equity. In India, growth equity funds highly depend upon the fluctuations of real estate fund in India.  

Leveraged buyout funds: These types of investments typically work on acquiring the controlling stakes. Either they work alone or in partnership with other PE firms. Usually leveraged buyouts involves the investment of little bit of their money and a bit of investment from the loan that they take from the bank. 

PE firms typically works on a combination of techniques which includes cutting costs, expanding profitability, making new partnerships, or the combination of all of the above. Though, private equity investments always come with a bit of risk factor but that is what businesses are all about.


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