Equity Investments
what is Private Eqity and equity Investments? Also what are Hedge Funds? Im in high school so please explain?
in a way that i can understand
Private equity: in layman’s terms, these are funds that typically acquire firms in the public or private domain, fix them up, and sell them off or issue a public offering (private firm becomes public and its ownership is divided publicly).
Equity investments: stock, you expect both dividend + price appreciation (you get a certain amount of money per share owned and you want to the price to rise)
Hedge funds: unregulated pools of money managed by firms that use a variety of investment strategies to achieve positive return on their investment. (they may dabble in everything, foreign exchange, stocks, bonds, etc.)
PE and Hedge Fund investments by individuals has certain restrictions such as minimum net worth and yearly income. In both cases, managers Make Money by earning certain fees that they charge to investors. Usually they take a fixed fee and tack on an additional fee for any gains. (i.e. 2/20, 2% fixed management fee, and 20% on the gains)
Private Equity Investments – Bloomberg