A Study On Private Equity Investments

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The last few decades have witnessed massive evolution of private equity (PE) investing from the small niche it used to be to the significant industry it is today. Currently, PE plays an essential role in the economy; it enhances innovation and growth in expanding firms or promising start-ups, as well as by nurturing the restructuring of companies that are already mature (e.g., Davila et al., 2003; Cressy et al., 2007). Private equity investing has been acknowledged as a new and proficient form of organisation that generates economic efficiencies through a superior governance framework. Due to its ability to offer benefits in terms of diversification as well as return relative to traditional stock and bond market investments, PE has become…show more content…
Based on Talmor&Vasvari (2012), in spite of the comparatively small number of vehicles, the improvement is striking since some of the largest and most prominent private equity vehicles, such as KRR and Blackstone, have preferred to go public. From an academic angle, the surfacing of listed private equity vehicles drastically increases the opportunities for scrutinizing an industry that is famous for being notoriously private. Similar to PEs in developed markets, sub-Saharan Africa experienced a build-up of activity that culminated to the financial crisis. Based on EMPEA (2011), a total of USD 6 billion dedicated for sub- Saharan African funds was raised between 2006 and 2008 by Private equity capital. In spite of the drastic increases compared with previous years (only USD 159 billion was raised by sub-Saharan African funds between 2000 and 2005), the level of PE in the area is reticent in global terms. During the same period Sub-Saharan Africa accounted for less than four percent of the USD 159 billion raised for all emerging markets between 2006 and 2008, and less than a fifty percent of the USD 1.4 trillion raised worldwide by PE funds in the same period. Mergermarket (2012) insists that in the same period, investment amounts across 47 markets in sub-Saharan Africa totalled USD 8 billion, compared with the USD
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