A Transitory Overview about Private Equity Industry
An investment capital source that can be obtained from high end individuals or wealthy organizations or like pension funds, used for investment in a diverse range of projects that are not funded by privately traded stock is known as private equity. It is often the case that along with borrowed cash, the money private equity company raise, is ploughed into firms that are seen to be under developing and are believed to be able to perform much better.
Over recent years, there has been an increase in growth of private equity firms. They basically find sources of capital, usually a combination of investment and borrowing capital from wealthy individuals and then ploughing it into a needy and under-developed business. The company or business that gets selected will be one that has been recognized as under-performing and would therefore gain from this injection of money and expertise.
Essentially the idea is that the business will be brought back into profitability and then sold off after few years for a profit. Individuals who have invested in a given company will make money from either just the sale or the profits and the sale. Marc J. Leder is the CEO of our company, Sun Capital Partners Inc., where he is responsible for the analysis, due persistence, and execution of numerous private equities which include consumer products, communications, healthcare, financial services and leisure.
The government considers private equity firms as a significant part of the economy, as they lift up dying and dead companies. Always they are not always successful in their deed, and they sometimes fail drastically. Some people dislike private equity firms because they believe they frequently put people out of work or put jobs at risk; that they do not care about the worker at all and have only profit in mind. The private equity firm may decide to sell of whole parts of the business as well as putting people out of work. These are always nearly the parts of the company that are thought to be impossible to turn around and have been considered unprofitable. This means that all assets and property would be sold and hence all workers and staff would be laid off.
Marc J. Leder also served as a Senior VP of Lehman Brothers in New York, prior to being the CEO of Sun Capital Partners Inc., which is a global private equity firm.
Sometimes, private equity firms are also the subject of some controversy, as they have appeared in current affairs programs and news over the years because of the generous tax breaks they receive. Other organizations and industries feel that this is not fair but the government may well claim that competition is necessary for the tax environment of these types of firms so that they do not move abroad. Irrespective of that, many people feel less sympathy for these kinds of risks in business as they are seen by some to put up with the already downward economic situation in some countries.