Private Equity — Growth & Buyouts

Private equity invests in unlisted companies to enable expansion, operational improvement, or consolidation, aiming for superior IRRs at exit.

It suits investors with high risk tolerance and long horizons. Fees are meaningful and returns are manager‑skill dependent; dispersion is wide across funds.

Allocate selectively through regulated vehicles, diversify across vintages/managers, and understand illiquidity.

IlliquidHigh riskManager alpha

Ways to Invest

  • AIF Cat II/III PE funds (₹1 Cr+); consider vintage diversification.
  • Feeder/Fund‑of‑Funds structures for global PE exposure.
  • Co‑investments alongside lead funds (by invite; sometimes lower fee/carry).

What to Evaluate

  • Realised exits, MOIC/DPI, team stability, sourcing & value‑creation edge.
  • Sector focus, governance standards, alignment and co‑invest rights.
  • Fee/carry, hurdle, clawback; reporting quality.

Why Private Equity Is Considered High Risk

Key risks often hidden beneath high return projections

Private Equity funds typically target high IRRs (18–25%+), but this comes with long lock-ins, leverage risk, concentration risk, and the possibility of total capital loss. Unlike public markets, PE valuations are opaque, infrequent, and controlled by fund managers — not daily market pricing.

  • Illiquidity: Capital is locked for 7–12 years with no exit options.
  • High failure rate: Majority of portfolio companies do not reach IPO or profitable exit.
  • Valuation opacity: NAVs are manager-reported, not market-derived.
  • Leverage risk: PE funds frequently use debt to amplify returns and losses.
  • High minimum investment: Typically ₹1–₹5 crore for Indian investors.
  • Fund-level fees: "2% management + 20% carry" heavily reduces net returns.

Who Should Avoid PE?

  • Investors needing liquidity or predictable cash flow
  • Investors relying on published NAV for confidence
  • Anyone without 10-year capital commitment capacity
Bottom line: Private Equity can generate high returns — but also high losses, long lock-ins, and no guaranteed exits. It should be treated as a satellite allocation for UHNI / Family Office investors, not a core portfolio asset.

Real Private Equity Examples

Well-known PE firms and funds in India and globally

India-focused PE Funds

Firm / Fund Type / Focus Notable Investments
True North Fund VI Mid-market buyout ACT, Niva Bupa, Dr Lal PathLabs
ChrysCapital Fund IX Growth & Control Infosys, HCL, Mankind Pharma
Multiples Private Equity Fund III Consumer, Financials, Infra PVR, Licious, Delhivery
Kedaara Capital Fund III Control & Co-control Vishal Mega Mart, Gokaldas Exports

Global PE Funds

Firm / Fund Strategy Portfolio Highlights
Blackstone Capital Partners IX Global Buyout Hilton, Bumble, Mphasis
KKR Americas Fund XIII Large-cap PE TikTok stake, Epic Games, Reliance Jio
TPG Growth Fund IV Mid-market Growth Uber, Lenskart, Dream11
Carlyle Partners VIII Global Buyout McDonald’s China, Airtel Africa

Education only; not investment advice. Markets carry risk; do independent due diligence.