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A Little Lesson On Private Equity Funds

 

Welcome to another Monday and newsletter.

 

Last week, reality television star Kim Kardashian announced that she had co-launched a private equity fund – Skky Partners.

 

According to her, the fund will focus on businesses in the consumer, media, hospitality and luxury sectors amongst others.

 

Although she is certainly not the first celebrity investor, Kim is towing a slightly different line. Most of her fellow celebrities tend to launch venture capital businesses rather than private equity funds.

 

In case you are wondering, there is a difference between these two types of businesses; several in fact.

 

Whilst both private equity and venture capital involve providing financial assistance to companies; the main difference is the stage at which such funds are provided.

 

Private equity involves large funding for mature companies whilst venture capital focuses on smaller-sized funding for start-up companies.

 

According to Investopedia, “private equity refers to the capital investment made by the investors or companies in the private companies that are not quoted on the stock exchange. The funds may also be invested in a public company to conduct buyout, though, which the public company will be delisted.”

 

Private equity funds tend to focus on a few companies whilst venture capital firms tend to have larger portfolios.

 

The risk profiles of these 2 types of businesses also tend to differ with the latter being the riskier of the two.

 

Interestingly, many global brands are owned by private equity funds. Examples include Airtel, Kurt Geiger, Miniso, Dr. Martens, McGraw- Hill Education to mention a few.

 

In fact, the world’s 25 largest private equity funds have raised approximately $800 billion in the last 5 years.

 

Irrespective of what one thinks of Kim, one thing is clear; she is a shrewd businesswoman who has carved out a niche for herself with laser focus and great discipline.

 

On another note, it’s about 11 days to the 7th edition of our annual Smart Stewards Summit, which is scheduled to hold from the 23rd-25th of September 2022 with virtual and physical participation options.

There will be four Masterclasses this year and they will take place on the 20th and 22nd of September.

 

 

Have you reserved your slot yet? Don’t wait till the last minute before you do. You may read more about the summit and make your registrations HERE.

 

Till we meet next week,  do have a fantastic week.

 

Toyin Oguntuyi