Private Equity (PE) is a type of investment fund where risk capital from high net worth parties is pooled to invest and acquire equity ownership in companies. A PE firm’s objective is to raise funds and manage these monies to generate favourable returns for their investors over a specified period.
Overall, the goal of PE is to boost the value of its invested companies and eventually sell them at a profit. PE firms typically receive a share of the profit generated.
A government-led PE approach, such as Ekuinas, has been implemented in the past for the purpose of achieving national objectives and it has proven successful. One of the leading PE firms in the world, 3i plc, was a government-led PE firm, introduced by the British Government post World War II with the objective to boost domestic investments. The firm has since been privatised and continues to create value in its investment portfolio which now includes global companies. Other countries have similarly adopted the PE model, mainly either to address the issues on shortage of capital for businesses to generate economic growth or to provide the catalyst to encourage private sector investments.
Such vehicles have enabled the creation of so many lasting companies that have positively impacted societies in a sustainable manner. Ekuinas aspires to make the same positive impact in Malaysia in a market-friendly, merit-based and transparent manner.
For more details on private equity, visit the following websites:
Institutional Limited Partners Association (ILPA)
European Private Equity & Venture Capital (EVCA)
China Venture Capital & Private Equity Association (CVCA)