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Private Equity Fund Strategies

Before we get into the different private equity fund strategies, let’s get something out of the way: the term “Private Equity” is a bit of a misnomer. In the early days of this industry, when all the good bands were still playing, private equity was exactly what it sounds like: capital from private investors went to private funds, which then invested in private companies.

Private equity investing was easy and straightforward. Fast forward to today and the landscape is much more complex in myriad ways.

Understanding private equity funds.

For limited partners (LPs), investors include public pension funds and as the name implies, they invest capital on behalf of their beneficiaries. Beneficiaries would be segments of the general public such as teachers and civil servants.

In terms of the investment vehicle or fund structure, it might actually be a publicly-listed entity where the interests of the fund are traded on the open market. Then, there are the underlying deals or portfolio companies, which could also be publicly listed in the case of PIPEs (private investment in public equities) or Take-Private (delisting) transactions.

Clearly, “private” isn’t exactly private. But the “equity” in private equity isn’t necessarily equity either. With debt strategy-focused managers raising debt funds to invest in different debt instruments, “equity” doesn’t exclusively refer to capital in this context.

Finally, there are the underlying companies that might not even be companies, like with infrastructure, renewables, and real estate investments which would really be projects or hard assets.

What does private equity entail?

The next thing we need to understand is what the term “private equity” encompasses. From an investment stage perspective, “private equity” essentially covers the timeline of a company’s evolution.

Venture capital refers to the early-stage development of a company, for example, but even venture capital has its own sub-stages, with its own unique risk/return characteristics (e.g., seed stage, start-up, late-stage venture, and early growth).

The next group of private equity fund strategies from a stage point-of-view would be growth equity and buyout. Here again, there are sub-strategies, such as funds focused on MBOs, buy-and-build, LBOs, re-financings, and more.

In between investment stages, debt capital is also usually available for these transactions with venture debt funds being raised for venture deals, and subordinated debt or senior debt funds for growth or buyout deals. There are variations of these categories too, such as sponsored or unsponsored.


For further complexity, there is also the issue of transaction or deal size, which consequently dictates the fund size raised by a GP. Case in point: venture capital funds can range anywhere from under $100m to over $1B. Buyout funds can range from approximately $100-200m for small-cap strategies to the multi-billion dollar mega buyout funds, and an underlying portfolio company investment can be hundreds of millions in size.

Regardless of whether you’re a GP performing peer benchmarking or an LP doing private equity due diligence on a track record or investigating markets, it is imperative to have a clear view of these various private equity fund strategies when you are performing any analysis. The output of any analysis is only as good as the input, the input is both the private equity data and analytics capabilities.

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Robust data analysis platform for private equity fund strategy

The private equity market may be a complex web of strategies and it may have its own terminology and jargon, but when it comes to your private equity analysis, there should be no ambiguity. That’s why CEPRES is specifically designed to handle the broad spectrum and many variations of private equity fund strategies.

The private equity data behind our platform is granular: it includes gross and net cash flows, operating metrics such as revenue, EBITDA, and debt, plus the investment characteristics of portfolio companies such as stage, sub-stage, industry, sector, transaction type, and many more.

As a GP preparing for fundraising and conveying your strategy to LPs, use our platform to prove your strengths against the appropriate peers. As an LP conducting due diligence on track records and researching markets, use CEPRES to understand the risk/return profile and underlying drivers at all levels and strengthen your decision-making with the most powerful tools on the market.

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