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Home » PRIVATE EQUITY

Private Equity Investing, a Growing Market

private-equity-market-investors-fund-firmIn recent years, with the innovation of technology and the development of a global economy, there has been a tremendous amount of wealth which has been generated.  Today, we now have far more millionaires than ever, and with the ease of information sharing, it seems as if that number will only grow.

With all of the wealth that now exists, you may ask, “Where do all of these high net worth individuals invest their money”?  Well, though most choose fixed investments (ex. Bonds, CD’s, Treasuries, etc.) for a portion of their portfolio, there are a rising number of investors seeking diversification within alternative investments.  Though other investments such as managed forex and futures trading have made a huge impact all over the world, the private equity market is the most important for one reason: it is the lifeblood of the global economy.

Before we get any further, let’s take a look back 20 years ago, and examine the beginning of a huge shift in the private equity markets. It the early 1990’s, it was a time for great opportunity and unparalleled growth within many parts of the world.  At that time, technology companies were popping up everywhere, the internet had just started to become popular, and many other new businesses had great ideas, but not enough funding.   As you will learn, this became a ripe environment for private equity firms, which lead to immense growth in the industry.

By the end of the 1990’s, investors had caught on to the trend in the private equity industry, and responded by allocating a large amount of assets. Once a market with a few billion dollars of participation, private equity had now become a multi-trillion dollar investment arena. Though this was great for investors, this growth had far more implications worldwide.  Now, with the help of private equity firms, much of the wealth which was generated over these years could go back into funding new ideas in the economy.  With over 2.5 Trillion dollars invested in private equity funds, things were good for investors, firms, and the world, until the financial meltdown of 2008.

Once the financial crisis had hit, and private equity had reached its peak, the economy started to tumble fast.  With a looming credit crisis, and limited funding access from private equity firms, the entire world economy started to feel the pain. No matter what the company or idea was, without funding there became little chance for new growth.  Once the private equity funded companies  stopped growing, investor sentiment dramatically changed.  Just a few months ago, investors had been lining up to invest with private equity firms, and now, they were nowhere to be found. Since very few people were willing to invest in late stage venture capital or pre-ipo companies, this lead to a cycle of economic stagnation that persisted until consumer sentiment improved.

In today’s investment world, the financial markets have turned around, spurring a change in the private equity industry.  Once a “sellers market” in 2008 and early 2009, we have now entered a “buyer’s market” that has lasted for over six months, and may persist for quite some time.  As a result, many companies are now considered undervalued and even more are underfunded.  Though we are not out of the woods yet and growth is slow, this shift in investor sentiment has lead to a rebirth of interest in private equity firms.

When you observe the massive growth in the 1990’s and recent years, it is safe to say that private equity will continue to be one of the biggest markets in the world.  With a profit potential far beyond traditional investments, and seemingly endless companies in need to funding, it has become a CRITICAL solution for investors, illiquid companies, and the world economy.

InsideTrade LLC Staff
Phone: (949) 444-2111

9 Comments »

  • newguy said:

    how do i start investing in private equity?

    what are the best types of companies to invest in and what markets are good with how things are with the financial downturn?

    can someone give me some insight? thanks

  • What do Private Equity Firms Invest In? | InsideTrade LLC said:

    [...] all over the globe. Whether it’s funding a medical invention or industrial supply company, the private equity market is important and has grown for one reason: each firm has a unique investment [...]

  • Private Equity Firms, Bad for Economy? (Video) | InsideTrade LLC said:

    [...] Any Market with Threats Scares Price Down, which can Make it Very Profitable for Some Firms in the Private Equity Market 10. Private Equity Firms can Use the Current Credit Crisis as an Opportunity to Offer Lending and [...]

  • Bernard said:

    For our economy to truly rebound and do well we need more relaxed government policies and outlooks with regards to Private Equity and Domestic Investment. International investors are looking to Africa and Asia for their investment monies. Hopefully Obama will see the writing on the wall and help out our growing, smaller companies and not only the big boys. There are some potentially great small cap companies out there that may find PE investment very soon though. I like to use the free microcap reports athttp://www.microcapreports.com/

  • donnainvestor said:

    newguy – can you email me at donna@crfinvestors.com for us to discuss some options together.

  • manmohan said:

    i would say there is a growing interest in private equity investments in ASIA. Particularly when the focus is in the area of Plantations and mining. I am now currently working in ASIA and in the process of setting up a private equity firm. I been in this industry for many years i must agree, times are looking bright in years to come for this industry.

  • vijendran r rao said:

    Dear manmohan,

    Get in touch. We may be of use to each other……mail me vijendran_us@yahoo.com

  • Mike Reid said:

    Have you guys thought about taking a private equity position in ''freedomskydisc international a nz company about to start building kitset solar powered 2-4man helium/hydrogen'disc aircraft and much larger systems using ALM 3D printing technology.

    The have exclusive license to use patented stabiliser of the inertialess drive rotor which cancels precession of a disc when in flight. A design has been posted on Holyflyer on youtube. Apparently they have access to other very advanced technologies invented by a Mr Ken Pedlar whom the SEC of NZ has been trying to stop from getting his fueless and waterfuelled power generators and globally proven fuel saving emissions reducing products to the world for well over a decade now.

    One wonders who is behind these long winded efforts to slow him down when all the technologies he's made are well proven green and designed to help mankind to save the world.

    Obviously someones who tigh with the energy industry has got it in for him and is pissing in the NZSEC ear to do all it can to block him getting mainstream funding but are not suceeding as he continues to go from strength to strength releasing new technologies every year or so.. Obviously Gods on his side as he's seem to be only intent on saving our planet and us too. Frankly the guys a hero in my books.

    We should support him and not listen to the idiots from the NZSEC who were quote as being asleep behind the wheel while the nz financial sector melted down around them. Not my of a resume for them or endorsement of their credibility, if you ask me. A bit like the New York bunch who were found to be watching porn rather than watching what was happening in the markets prior to the collapse of the finance sector. Anyway they do have the role to play when all is said and done and thats why this website is such a breath of fresh air to stop the real criminals out there and they are numerous indeed.

    Regards

    Mike Reid
    P.S Great Site and about time as I too have been scammed by these PPP pricks when in Zurich a few years back.

  • jim jack said:

    Mike, you are incorrect regarding the SEC, they stopped Ken Pedlar from selling shares without a prospectus or investment statement.. Those are the rules every other company in NZ has to follow but Mr. Pedlar disregarded those rules three times. If he followed the rules and applied due diligence to his business practices there would have been no problem.

    It is not conspiracy, it is an issue of legal compliance of NZ law regarding sales of shares.

    Please do not try and paint it as something it is not. That is being dishonest.

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