Private equity funding is the injection of capital into a business in return for an equity stake. For management teams looking to accelerate growth and build scale and value, whilst remaining at the helm of their business, it can be an ideal funding solution.
Whether it’s about making acquisitions, launching new products, building new manufacturing facilities, breaking into new sectors or expanding overseas, private equity partners work with management teams to develop and implement a business strategy to make this happen.
A private equity transaction can be structured in multiple ways. It is most commonly used to support a change of ownership during a buyout, enabling an incumbent management team to increase their stake in the business they run and other shareholders – individual or institutional – to divest fully or partially.
Private equity firms can take a range of positions, from investing as a minority or majority shareholder, to providing capital alongside other investors.
While private equity companies invest for a shareholding, those focused on partnership do not take control of company. This means management teams are still at the forefront of the decision-making process.
LDC has a unique funding structure compared to other private equity firms, who generate capital through funds and large institutional investors, including pension funds, insurance firms and banks.
As part of Lloyds Banking Group, LDC does not need to fundraise due to ‘evergreen’ funding from the bank. This allows the firm to deploy ‘patient’ capital, working to their portfolio businesses’ timetable and investing for as long as necessary.