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We have all heard about private equity and their funds. If you want to know all about it, check out the explanations on Private Equity Fund.

All companies that represent a good opportunity for high earnings can expect private capitals to invest in it by creating funds. They come with a fixed investment that can last from four to seven years. After that period the private equity fund hopes to exit a particular company with a very large profit. When exiting a certain investment, there is a possibility to sell the business to another private company.

The primary sources of private capital funds are accredited investors and institutional funds. They are the only ones able to provide large capital for a longer period of time. Teams of professionals manage all assets.

There are two types of private equity funds. One is buyout and the other is venture capital.

Buyout funds invest their capital in already well-established companies that they are confident can provide them with earnings.

Venture capital funds invest in companies that are just starting to work or in some smaller companies, which they believe have a lot of potential and can generate large revenues over the years. For small businesses, this can be a stepping stone in their business, so they can grow into large companies. Investors, usually on the advice of their economic experts, invest their capital in such companies, expecting a large turnover of money.

The exit of private capital funds can be complete or partial. It is partial when certain funds are withdrawn or another investor buys part of the business.

If you want to know much more about this topic, one click on Private Equity Fund is enough. Here you will read everything you are interested in about private equity funds.