It’s clear to me when you do private equity well, you’re making companies more efficient and helping them grow and become more profitable. That success means our investors – such as public pension funds – benefit, which contributes to the economic wealth of society.
What is PRIVATE EQUITY?
Private equity is capital that is not listed on a public exchange. Private equity is composed of funds and investors that directly invest in private companies, or that engage in buyouts of public companies, resulting in the delisting of public equity. Institutional and retail investors provide the capital for private equity, and the capital can be utilized to fund new technology, make acquisitions, expand working capital, and to bolster and solidify a balance sheet.
…and what is a LBO?
The leveraged buyout is a specific form of buyout and refers to a corporate takeover that is predominantly financed by borrowed capital. In this type of company acquisition, investors are involved along with the equity capital. At the same time, the company procures outside capital, for example by taking out bank loans. Together with the management, the investors then try to achieve an optimal distribution of equity- and debt capital, whereby the profitability of the equity capital contributed by the company is to be increased enormously (leverage effect).
It is more than unusual to present yourself to the financial world at the age of 21 and to talk and write about topics such as private equity and, in this specific case, leveraged buyouts. For me, finances are like an instrument on which you can play in almost any pitch. Whether music or the finest Swiss wristwatches: the elements have to harmonise!
At present, the dream of my own private equity fund is still in the planning phase, but in the foreseeable future we will influence economics on a global scale.