Private equity is a term used to describe an investment made by a specialist firm, a venture capitalist or a private investor into a private company, which typically has high growth potential.
Private equity (PE) and venture capital (VC) firms often raise their funds from institutional investors such as pension funds, insurance companies, endowments and high net worth individuals.
Whilst there is no hard and fast distinction between the separate definitions of PE and VC, in general, venture capital funds tend to invest in companies at an early stage of their development, when there is often little, if any, track record of profitability. These companies might often be cash-hungry.
Private equity funds, in contrast, usually invest in more established companies, with the aim of reducing inefficiencies and driving growth through improved margins and increased revenues. Quite often, a private equity or venture capital firm might also invite an individual private investor (sometimes called an ‘angel’), who they know and have faith in, to invest some of their own money alongside the PE or VC firm, so as to supplement the strengths of the existing management team.
Regardless of the type of investor, the ultimate aim is to create value. Investors typically look for strong management teams with a market opportunity and a good business plan.
The corporate department at Lupton Fawcett has experience in advising on all aspects of PE and VC work, including fund raising, carried interest and fund structuring.
Our expertise includes offering guidance on start-up investments and turnarounds, as well as dealing with development capital transactions, management buyouts and buyins, institutional investments and debt for equity restructurings. Read how we helped Turbo Drinks Company Limited secure a £200k private investment and BGF's £10m investment in York Mailing.
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Whether you have been approached by a PE house or a VC team, Lupton Fawcett provides invaluable support at each stage of the process. With offices in Leeds, Sheffield and York, we can offer our services across Yorkshire and the UK. For further details, please contact Andrew Lindsay.
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Dirk Mischendahl, Ross and Cashmore Limited; Leeds Ice Cream Company Limited
Having Giles Clegg acting for us at director level, with this wealth of experience, meant that we were constantly several steps ahead of the other advisers.Henry Robinson
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Andrew and his colleagues at Lupton Fawcett were accessible and they provided us with excellent advice throughout the cross-border transaction. We would recommend the services of Andrew and his team to others.
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