Posted: 3 December 2020

Beyond the obvious - twelve unsung uses of private equity

Beyond the obvious - twelve unsung uses of private equity

Rebecca Sinclair, investment executive at WestBridge, looks at some of the often overlooked uses of private equity.

Think of private equity, venture capital, institutional investment and your mind probably turns to funding for management buy outs and other such corporate activity.  Well, it’s time to think again.

Increasingly, private equity houses are supporting management teams with much more than just cash.  Here are some of the less well known uses that private equity is put to:

  • Funding R&D into new products
  • Strategic acquisitions
  • Diversifying into new products and regions
  • Growing the management infrastructure
  • Training second tier management for succession
  • Strengthening the balance sheet by rebalancing borrowings
  • Launching an export drive
  • Modernising facilities, equipment and systems
  • Increasing stock levels to satisfy an order book
  • Reviewing and changing a threatened business model
  • Commercialising scientific advances
  • Aggressive marketing

Select your partner well

It’s worth spending time researching and selecting the right private equity house for you. Meet the individuals who’ll work with your management team, contact other companies they’ve helped, ask rigorous questions about their experience and expertise.

Much like all business relationships, don’t underestimate the value of chemistry. 

Inevitably, the relationship won’t always be a beautiful thing – you will clash, you will disagree – but provided you share a common goal and mutual respect, these will be minor and ultimately constructive hiccups along the path to growth.

Typically, WestBridge invests between £10m and £20m in established, profitable and fast-growing UK SMEs with enterprise values of up to £50m.  We are always keen to hear from ambitious management teams that require development capital, acquisition funding or support for a management buyout.  To hear more about our investment criteria or discuss the suitability of a company, do get in touch.

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