PRIVATE EQUITY AND IMPACTS ON RECENT FINANCIAL CRISIS

Abstract

The private equity industry has grown markedly in the last twenty years and academic research has increasingly focused on the effects of private equity. Private equity is capital that is not noted on a public exchange. Private equity is composed of funds and investors that directly invest in private companies, or that engage in buyouts of public companies, resulting in the delisting of public equity. There has been a lot of research carried out on private equity hence this not being the earliest or will be the latest. Some researchers focus on perspectives of the limited partners (LPs) and some focus on the company level whiles comparing returns (Thorkilgaard, 2012).
The aim of this essay is to introduce private equity, analyse the extent to which private equity has fallen victim to the recent credit crunch and to bring out underlying issues in hedge funds and private equity. Lastly is to speculate the future effects of this turmoil.