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    Private Equity Firm

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    Aayush Garg

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    Private Equity Firm

    Uploaded by

    Aayush Garg
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    Download as docx, pdf, or txt
    12 views4 pages

    Private Equity Firm

    Uploaded by

    Aayush Garg

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
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    1

    Private Equity Firm

    Student Name

    Course Name

    January 9, 2021
    2

    Private Equity Firm

    A private equity firm can be described as a company that has specialized in financing and

    financing industries and buys businesses that are not traded publicly on the market. These

    organizations fund businesses that are not traded publicly, award them financial credits for their

    activities, and support failing companies. They run and return to their operational stability—the

    acquisition by these companies of production or retail business impacts the newly acquired

    company. The impact of acquiring a manufacturing company can vary from the impact of

    acquiring a retail business. This is because a production company works wholesale with

    distributors, while a distribution company works with the actual customer on the

    market[CITATION Aki17 \p 574-581 \l 1033 ].

    If a private equity company acquires a manufacturing company, these businesses will run

    and have manufacturing companies at a higher return level because of their capital resources.

    Their stable capital base allows private equity firms to invest in raw material procurement,

    thereby improving manufacturing production. When a private equity corporation has purchased a

    manufacturing business, privately-owned companies are responsible for ensuring that the

    producing company takes the best advantage of the market place and therefore uses their

    financial strength to market such a manufacturing entity, thus making consumers aware of a

    production entity's presence on the market [CITATION Gat14 \p 1-10 \l 1033 ].


    3

    In general, changes in the investment in a company's capital are intended to directly or

    indirectly improve its production and sales. Consequently, increased capital spending for

    businesses purchased by private equity companies can be related to rises in their revenue over

    recent years. The data disclose the connection: the large businesses purchased by major private

    equity firms in the years following their acquisitions increased their revenues by almost 60

    percent more than the average for both US manufacturers and non-manufacturers.

    Also, the rise of private equity-backed firms' revenue per employee was twice as high as

    in all the companies, a sharp measure of competitiveness and performance. Data on sales-per-

    employee rises that provide an overall measure of productivity and efficiency also shows that

    businesses have achieved success by major private equity firms during this time. New jobs were

    generated by large companies purchased by large private equity companies, five to seven times

    the average of all manufacturing and non-manufactory companies[CITATION son09 \p 1-10 \l

    1033 ].
    4

    References

    Akin, I. (2017). Private equity and impacts on recent financial crisis. International Journal of

    Social Humanities Sciences Research, 4(11), 574-581. Retrieved from

    https://www.researchgate.net/publication/320522612_PRIVATE_EQUITY_AND_IMPA

    CTS_ON_RECENT_FINANCIAL_CRISIS

    Gatauwa, J. M., & Mwithiga, A. S. (2014). Private equity and economic growth: a critical review

    of the literature. European Journal of Business and Innovation Research, 2(3), 1-10.

    Retrieved from

    https://www.researchgate.net/publication/327014272_PRIVATE_EQUITY_AND_ECO

    NOMIC_GROWTH_A_CRITICAL_REVIEW_OF_THE_LITERATURE

    sonecon. (2009). The Impact of Private Equity Acquisitions and Operations. Retrieved from

    sonecon:

    https://www.sonecon.com/docs/studies/Private_Equity_Capital_Spending_Sales_Jobs-

    January2009.pdf

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