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Private Equity
Private equity can be defined as a tool for non public companies to expand or shore up one's balance sheet. Private equity capital is made available to companies or investors not quoted on a stock market.
There are many advantages to private equity verses public equity. One such advantage is giving management the ability to focus on company goals instead pleasing the market. Within a public company simple decisions become more complex such as the closing of a plant or operational facility; within a public company this may be the best course of action for the company but because it could negatively impact the stock price the solution becomes complex. This type of conflict would never be an issue inside a company harnessing the power of private equity.
One common misconception of private equity firms is that their first course of action will be removing the management team and restructuring the company. 13i prefers to work with companies that have strong management teams already in place. An advantage of private equity is that management's pay is kept private thereby allowing private equity firms to pay higher wages when deemed appropriate. These wages can often exceed those of public companies which can allow private equity firms to more easily recruit top-tier talent.
These strategies coupled with 13i's management techniques allow our portfolio companies to produce stunning results.
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