Private equity is a type of financing in which a person invests in a private company, with the aim of having a higher return than the public capital markets. To invest in private capital, it is important to take into account some recommendations.
Private equity funds are a type of investment managed by professionals that seek to provide an economic return to their investors, which is why it has established itself as an increasingly efficient type of investment.
In simple terms, private equity seeks to invest money in a company. Typically, investments of this type are made in successful businesses or traditional industries.
In other words, private equity investing is a way for investors to participate in the private equity market. Companies are specialized in buying other companies, transforming them and selling them for profit. Venture capital firms, meanwhile, use their own money and sometimes borrow to buy companies.
In this case, investment in venture capital is usually done through venture capital funds. These are mutual funds professionally managed by specialists in this type of investment strategy. Investors can invest small amounts of money in these funds through mutual funds or exchange-traded funds (ETFs).
So, the trajectory and success rate of the company in which you are interested in investing is essential to anticipate the possible scenarios of capital growth through the private market.
Types of private equity in the United States
Private equity is a type of capital that is invested in companies that are not publicly traded. Private investors make these investments through private equity funds or directly into the business of a company.
As we have seen in other articles, there are three main types of private equity in the US: leveraged buyouts, mezzanine investments, and growth capital. We summarize some of its main features and functions.
A leveraged buyout occurs when an investor acquires a majority stake in a company by borrowing against its assets, and then uses the acquired assets as collateral for the loan. Once acquired, the company is restructured to allow it to generate higher profits and repay its debt obligations over time. LBOs require large up-front payments but low operating costs; they are best suited for mature companies with stable cash flows and predictable revenue streams.
Unlike leveraged buyouts, mezzanine investments do not involve taking companies out of the public markets entirely, but instead provide financing to companies that have already been taken private through other means (such as leveraged buyouts). Mezzanine funds make loans or provide equity investments to companies seeking capital at lower cost than would be available in traditional credit markets (such as banks).
Growth capital is a type of private equity that provides a company with financing to expand its business or undertake new projects. The money can be used to hire new employees, pay for marketing campaigns, or upgrade equipment and machinery. Growth capital can also be used to buy out competitors or acquire smaller companies that are part of your supply chain or distribution network.
Why invest your private capital in BAI Capital?
BAI Capital or Become American Investor LLC is a boutique firm with more than 12 years of experience specializing in raising, investing and managing private capital. Mainly, for capital investments in real estate development projects in the United States.
With a presence in the real estate sector in the states of Florida, Texas and New York, we specialize in generating value from the acquisition of land to the development of large-scale projects, such as residences for the elderly, student residences, multifamily buildings for rentals. and mixed-use, including condominiums and retail.
Our mission is to safeguard the capital of the partners and the capital itself under the minimum risk exposure, with a safe development and going through all the stages: Land purchase, urban zoning adjustment, commercial vision in the architectural development and management of work permits. Then, we take charge of the capitalization, construction and exit with return of the capital and profits to the partners.
In this way, we guarantee fixed and stable returns for your client portfolio. In addition to having a confidential work protocol with encrypted web forms, use of protected personal data and private meetings with our agents throughout Latin America.