Question

Explain the impact of private equity firm acquisition of manufacturing and retail firms

Answer 1

Answer:

The purpose of private equity firms is to provide the investors with profit, usually within 4-7 years. It comprises of companies or investment managers that acquire capital from wealthy investors to invest in existing or new companies. ... The equity firm will commonly purchase a company via auction.There are two ways PE firms make money: through fees and carried interest. The first (and most reliable) method for a PE firm to generate revenue is through fees. ... First, all LPs have to pay a management fee—usually 2% of committed capital—for the privilege of investing with a private equity firm.

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