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The main difference between private equity funds and hedge funds is the length of commitment for investors: Private equity is a longer-term investment, typically five to seven years; in contrast, hedge fund investors generally can withdraw their money once a quarter. Hedge funds also make use of short selling — a bet that stock prices will fall — and exotic trading mechanisms for immediate gains.
Private equity has always been the little guy's mode of financing — the funds that back entrepreneurial firms or help with the transition when family members want to hand off the reins to others. |
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Southern California
, with more than 5,000 small to mid-sized companies, is an enormous marketplace for private equity and small-scale investment banking.
How do private equity firms make such high returns on investment? Partly through leverage. The funds borrow four to five times the amount of equity raised from investors and so are able to commit much more capital to companies and situations. If deals succeed, the return on the equity portion is correspondingly larger.
The level of risk may be higher for private equity investors, but the funds can try to limit the downside by helping manage the companies they buy into, whether by sending in skilled executives or steering policies.
With over 19 billion in assets available through partners. SSGI has a long history of helping entrepreneurs build successful venture-backed businesses. Successful venture capital partnerships go beyond simply supplying capital. Entrepreneurs need a venture capital partner that will improve their ability to create shareholder wealth. An infusion of capital is often the catalyst that moves your business forward, but proper execution of the business strategy is essential to maximizing its impact on your company. And working with management teams to ensure perfect execution is one of SSGI’s core strengths.
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