Impact of Private Equity Investment Globally
Private equity slowly entered the business market in India through foreign investments and has made a very impressionable mark in a short span of time. The most important section of private equity which caught the eye of the Indian market is the venture capital. Right about when the startup culture was starting in India, the venture capitalists entered the investment sector through foreign direct investment (FDI) and made many small budding businesses hugely successful in India. Some of the examples can be seen in the leading Indian online stores and e-commerce businesses.
The growth capital has also done incredibly well in the Indian market helping many businesses to flourish and expand their verticals in many fields. The growth capital in India came as a necessary tool for establishing businesses and organizations. It emerged as a great resort for businessmen who were looking for safe investments so that with affordable returns they could experiment in the other aspects and grow as a unit. Private equity being a naturally safe investment method brought a great sigh of relief for these companies and has contributed a lot to growing Indian economy as a whole. Private equity funding has opened new doors of success and got a large section of community-driven towards dreaming of establishing the huge business.
Private equity funding was largely a European and western business tool that started off in the 19th century. After having their ways through many busts and booms it has finally found its way to the developing companies where there was huge business potential with limited capital resources. The larger firms in the world have started to invest largely in these countries and have also inspired many other Indian forms to rise to the occasions to contribute to the business. The monopoly market in India has been melancholic for long but now the Indian companies are in harmony with the private equity sector.
Over a period of time, the PE industry has been able to deliver double digit IRRs consistently. In some cases, they have outperformed stock market as well. As per the latest equity trends, 2018 and the upcoming year looks promising for this industry, especially for Europe, Asia, and the US. All thanks to the boom of digital technology across platforms, people are able to recognize the strengths and benefits they can have through private equity investment. This shift has enabled the businessman to make more profitable decisions as well.