Question

what are the most important things that i need to know in order to start a private equity in the future? what is the best way to start?

Answer 1

One can start a private equity fund laying out strategy in advance because the formulation of strategy are very important because these private equity funds are generally targeting a particular sector and one need to identify the sector by preparation of an adequate strategy.

It will involve with setting up the business plan which will be properly including all the possible planning related to various market movements and fund management. Once the business plan has been set up then it is leading to setting up with the operations of the private equity fund and once the business operations has been set up, then these private equity funds will be intended to select a business structure because structuring of business is the most important thing and then once the business structure has been set up by the private equity fund, then an appropriate fee structure will be set up.

The most important stage of private equity fund will be generation of the capital and raising of the capital and all those managing the firm will need to contribute almost 1to 3% of their respective portfolio so there will then be a contribution from outsiders as they will be looking at the management willingness to take the risk and hence, fund will be operated.

The best way to start is to set a firm and manage with various partners and these partner should be high risk taking partners which can help in contribution of a large amount of the capital and help in making profits.