DEMYSTIFYING PRIVATE EQUITY
September 13 2016.



Private equity, or “PE”, is now a mainstream funding option. Most of the mid-market firms have raised new funds in the last 18 months, and they are actively seeking out new business opportunities. And more of these funds than ever are finding their way to supporting transactions in the SME sector.


In February 2016, Tim Hames, director general of the British Private Equity and Venture Capital Association commented, "Our best estimate is that more than 85pc of private equity and venture capital investment in the UK is now in the SME sector".

Very broadly the types of deals private equity will support can be split into three types:

1. Development capital –100% of the investment remains in the business providing funds for a business to, for example, invest in R&D, development of a new site, overseas expansion, or an acquisition. Often these types of transactions are funded by types of firms called Venture Capital Trusts or “VCTs”.


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