Investment Philosophies of Private Equity Funds

Robb LaKritz, co-founder of LaKritz Adler Development in Washington, D.C., has years of experience in the real estate development and investment arena. A former presidential appointee, Robb LaKritz is also the founder and CEO of LaKritz Holdings, a diversified private equity fund invested around the world.

A private equity fund is generally a partnership of firms or individuals formed to invest in private companies. Usually created with capital for investments not traded on a public exchange, private equity funds target specific industries or a broad market and often have long investment horizons. Once a sufficient stake in ownership is obtained, a private equity fund seeks to improve the value of an investment through an expansion strategy or operations and management changes.

The structure of a private equity fund often consists of a fund manager and corporate experts who monitor the companies in which the fund has an ownership stake. The fund manager oversees investment goals which may involve:

-Venture capital – financing companies in early growth stages.
-Growth capital – financing the expansion of an established company not traded on the public market.
-Leveraged buyout – financing existing management to enable it to take a controlling share in a company.
-Distressed buyout – financing a company unable to meet debt obligations. This usually includes a turnaround strategy.

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