Private equity investments are typically made by institutional investors (private equity firms) into non-publicly traded companies with the objective of generating a sustainable increase in value. Private equity provides mid-sized companies in particular, as well as their management teams, with the opportunity to realise further growth, make investments and hire employees, thereby securing or even enhancing the company’s competitive positioning.
At the same time, equity participation schemes enable management teams to invest directly in the company, which creates an alignment of interests. Investment themes range from classic ownership successions and spin-offs to growth initiatives.
Several scientific studies have confirmed the positive economic impact of private equity. Apart from increasing productivity and enhancing competitive positioning, according to the BVK, the average number of employees of companies backed by private equity has increased disproportionally compared to the rest of the economy.