A PE practitioner argues the case for resurgence in growth equity in venturebeat. Growth equity relies less on leverage and more than typical buyouts. It targets companies in fast growing sectors and fast growing companies with innovative business models in established sectors.
The US-based author says there is a “huge range” of companies at the growth stage in the lower middle market, 32,000 according to S&P Capital IQ research data from 2013. In many cases, they aren’t in Silicon Valley, where capital readily flows, but in high-growth/lower-hype markets such as Dallas, Denver, Atlanta, Salt Lake City, or Chicago.
The talent pool is available to staff up these quick growing ventures and the risk / return profile is better than venture capital benchmarks. One of the big names in PE is putting money to work in that segment of the PE universe, namely Warburg Pincus. It is process of raising a giant USD 12 billion fund to invest in growth deals globally.