The term ‘private equity’ refers to the provision of investment from investors to finance and acquire equity ownership in private companies that are usually not listed on a public stock exchange or other regulated market. Through active ownership, private equity investors work together with management teams of the companies in which they invest to enhance long-term value. Private equity investors typically realize the value of their investments through a sale or initial public offering (IPO) of the company they invested in.
A clear distinction should be made between venture capital and private equity. Venture capital refers to the formation of and investments in early-stage or start-up companies with little or no track record. Private equity (where Waterland is active) refers to the acquisition of significant stakes in larger and more mature companies that demonstrate the potential for growth and performance enhancement through structural, strategic and operational improvements. Typically, holding periods are between three and seven years.
The large majority of investors in private equity are public and private pension funds, fund of funds, endowments & foundations and financial institutions.