Private Equity (PE)

A style of private equity investment focused on mature, profitable, or near-profitable companies seeking capital to accelerate expansion without ceding majority control. Growth equity investors typically target businesses with proven product-market fit and strong intangible asset bases, providing capital for scaling operations, entering new markets, or funding acquisitions.

The percentage ownership interest a shareholder holds in a company. Equity stakes determine voting rights, dividend entitlements, and the share of proceeds received in a sale or liquidation event.

Net income divided by shareholders' equity, measuring the return generated on owners' invested capital. High ROE can indicate efficient use of equity but should be interpreted alongside leverage levels and the quality of earnings.

The value attributable to the shareholders of a business after deducting all debt and debt-like obligations from enterprise value. Equity value represents what the owners would receive if the business were sold and all liabilities settled.

The incremental return that investors require for holding equities over risk-free government bonds, reflecting the additional risk associated with equity ownership. The ERP is a critical input to cost of equity estimation under both CAPM and build-up methods.

A private equity transaction in which two or more PE firms jointly acquire a target company, sharing the equity investment, risk, and governance responsibilities. Club deals enable firms to pursue larger transactions than they could finance individually and provide portfolio diversification benefits.

An acquisition in which a significant proportion of the purchase price is funded by debt, using the target company's assets and cash flows as collateral. LBOs are a common private equity strategy for acquiring mature, cash-generative businesses.

A U.S. tax provision allowing investors in qualifying small businesses to exclude a portion of capital gains from federal taxation upon the sale of stock held for more than five years.

How do you value a brand and what factors drive brand worth?

Brand value is driven by pricing premium, customer loyalty, and market position. Valuation methods include comparable company analysis, price premium multipliers, and income approach based on branded revenue.

How can intangible assets drive revenue growth?

Intangible assets drive growth through brand premium pricing, customer retention, technology differentiation, proprietary data advantages, and scalable IP licensing — all generating returns without proportional capital expenditure.

What ESG-related intangible assets are gaining recognition?

ESG-related intangible assets include sustainability certifications, carbon credits, green brand equity, social licence to operate, ESG data systems, and responsible supply chain relationships.