The influence of Private Equity players on the corporate world is on rise. They are playing an important role in terms of value creations.

Compared to mainstream capital markets, private equity is not freely tradable on stock market in which the funds have been raised in the private markets. Institutional investors who are defensive in nature may invest in private equity funds. These funds, in turn are used by private equity players for investment in target companies. Under private equity, different types of investment options are available. These include leveraged buy-out, venture capital, growth capital, angel investing, mezzanine capital etc. The mezzanine capital is another class of unsecured, high yield alternative investment and focuses on structured debt securities in private companies.

While PE players generally control companies' management in which they invest. In some cases, they also bring in new management teams that focus on making the entity more viable. The selling out or exit is achieved by the way of Initial Public Offerings (IPO) by floating the company on a stock exchange.

Private equity provides control of the company to a small group of executives or partners who run private equity firms and bear the risks and rewards. Unlike regular corporate set-up, these partners keep a bird's eye view on the company and regularly check whether their money actually at work or not. In some cases, they do not even hesitate to fire the management team or sell the company.

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