Private Equity Success: High Returns in a Risky World

Authors

Ross Corey, Santa Clara UniversityFollow

Document Type

Article

Publication Date

9-5-2018

Abstract

This article will be covering how a private equity firm, despite the firm’s investment preferences, can lessen their risk without negatively affecting the potential gains in their assets and capital by making the right considerations. Investing in platforms such as stocks, bonds, and real estate may offer good long term returns. A small percentage of people look to invest in private equity markets. A reason for this is because funds have high minimum investments which makes private equity more exclusive compared to many public markets. A private equity investment, in most cases, is an opportunity for higher returns, with the cost being that there is more risk involved. This is not always the case as there are stocks that are much more risky, but compared to the typical personal stock portfolio an individual has, private equity is typically seen as being riskier. Within private equity there are ways a firm can set itself up for a better chance at succeeding in the industry. There are considerations and strategies that firms can implement to increase their chances at generating less risk in their investments without negatively impacting their capital returns. These factors include, but are not limited to, the relationships that the firm builds, the decision making process within the firm, and a firm’s ability to analyze the current market. If a private equity firm considers and has a reasonable approach to these components then the firm will be well on its way to achieving the luxuries and success that every firm and investor seeks.

Recommended Citation

Corey, Ross, "Private Equity Success: High Returns in a Risky World" (2018). Pop Culture Intersections. 27.
https://scholarcommons.scu.edu/engl_176/27