What is private equity?
Private equity typically refers to a broad spectrum of equity investments into private companies (not traded on any public stock exchange). A key difference between investing into public companies vs. private equity is that private equity investors work closely with the management of the investee companies. Private equity managers take active roles in supporting and developing companies into "better businesses" with a long-term goal to increase the value of the investee companies. At Sentica we believe in creating value via long-term responsible actions.
Venture capital vs. buyout investing
Private equity can be divided into two subcategories; venture capital and buyout investing. Venture capital is typically geared towards early stage companies with cash ﬂow negative operations demanding signiﬁcant capital support while developing new business models into functioning companies.
Buyout investing, on the other hand, focuses on developing, growing and reﬁning existing, proven and cash ﬂow generating businesses into even better businesses. Sentica’s focus is on the smaller spectrum of buyout investing, which often includes strong growth phases.
TO THE NEXT LEVEL
Even though private equity investors typically have a limited ownership period of 3-6 years, it is not short-sighted. Private equity can only be successful if it creates returns via developing solid, sustainable and transparent value through the investee companies.
The most common forms of value creation in the investee companies have been sales growth and profitability improvement. We believe that private equity can be a superior form of ownership, which takes companies to the next level.