Active Microcap: A Private Equity Alternative – Acuitas Investments
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The views expressed in this article are those of the authors as of the dates of the article. The opinions expressed are subject to change, are not guaranteed and are not intended as a forecast or as a recommendation to buy or sell any security.
Microcap investing and Private equity investing may have several inherent differences, including investment objectives, costs and expenses, liquidity, safety, guarantees or insurance, fluctuation of principal or return, and tax features. The differences depend on individual strategies as defined in prospectus. In general, Private Equity capital is not quoted on a public exchange and consists of investors and funds that make investments directly into private companies or conduct buyouts of public companies that result in a delisting of public equity. Capital for private equity is raised from retail and institutional investors, and can be used to fund new technologies, expand working capital within an owned company, make acquisitions, or to strengthen a balance sheet. The majority of private equity consists of institutional investors and accredited investors who can commit large sums of money for long periods of time. Private equity investments often demand long holding periods to allow for a turnaround of a distressed company or a liquidity event such as an IPO or sale to a public company.