Global Perspectives on Venture Capital and Private Equity

Private equity encompasses all types of equity investments in non-publicly traded companies, such as venture capital and buyout investing. Venture capital funds specialize in long-term private equity investments in startup and super-growth companies that offer high potential returns and substantial risks, while buyout funds invest in established businesses that need financing capital for the change of ownership. Global venture capital and buyout funds provide investors with the opportunity to capture innovations and growth around the world while enjoying the enhanced return potential and risk diversification. Major private equity hotbeds include the established markets of Europe, Israel, Canada, and the emerging markets of China, India, and Russia. While PE investments provide superior return relative to public equity, they are also associated with illiquidity and various other risks. As an alternative investment asset class, investors need to assess its risk and return profile carefully before making the asset allocation decision.