What is private equity?

Private equity firms provide long-term equity finance to unquoted companies by investing money in the form of shares or shares and shareholder loans. These companies are not quoted on public stock markets which is why it is called private equity. Private equity firms raise money for two different types of funds – venture capital funds and buy-out/growth funds.

Why is private equity a better form of ownership than quoted markets?

Private equity is not better or worse – it’s a different way of owning companies. In some circumstances the governance structure and the alignment of interest between owner and manager makes it easier to turn round companies or develop them. But the two forms of ownership are complementary. After all, many IPOs (initial public offerings) are of private equity-backed companies. And IPOs account for about 20% of private equity exits. Recent independent research commissioned by the BVCA and the London Stock Exchange clearly demonstrated private equity/venture capital backed companies floated on the stock market outperformed similar companies that had not received industry investment.

What about debt – why is it required?

Almost every company, public or private, has a capital structure made up of equity (stocks) and debt (bank loans, bonds, etc.). When a private equity firm invests in a company, they arrange financing which is made up of equity they invest from their funds and loans from a variety of different sources.The level of debt appropriate for a particular company is a function of the general economic outlook and the nature and needs of the business itself. A young developing company may have no debt funding, whereas a mature company with a strong cashflow can comfortably sustain a high level of debt in its capital structure.

What makes PHD Different?

Experience, judgment, and synergy. Our partners have spent years building their extensive networks in our target markets and we strive every day to bring opportunities to bear for our portfolio companies. The experience of our partners comes from over 150 years of advising successful companies in our target markets and their extensive private equity investment experience. Our experience and judgment also comes into play when closing deals in our target markets. When we find an excellent management team, we have the experience to structure a deal that works for all stakeholders. No matter what kind of deal, we’re able to harness the resources of the entire firm to provide the knowledge, experience and introductions that make our clients successful. If you’d like to learn more about what we can do for you, please contact us today.

How involved in the companies are you?

We make it a priority only be very involved with our portfolio companies when we can add value. We will support the board of directors to an extent proportional to our investment. We would expect to provide prominent support in acquisition, financing sourcing, board member recruitment and generally just making the right introductions.

What and who is PHD Equity Partners LLP?

PHD was founded in 2008 as a private equity fund manager by the partners of PHD Equity Partners LLP. All the partners are also directors of Dow Schofield Watts Corporate Finance Limited.

How can I introduce an investment opportunity to PHD?

Business plans or inquiries should be directed to any of the partners: 7400 Daresbury Park, Daresbury Cheshire WA4 4BS. Click here to contact us.