Free VC Directory
With any B-Plan Purchase
425 Page Capital Directory
Through Apr. 30


Custom Business Plan
$425 Flat Rate
No Templates Used
7 Day Turnaround

All Purchased Plans

Are Updated for 2017


Free VC Directory

With any B-Plan Purchase
425 Page Capital Directory
Through Apr. 30


Custom Business Plan
$425 Flat Rate
No Templates Used
7 Day Turnaround

All Purchased Plans
Are Updated for 2017

Private Equity Firm SWOT Analysis

 

Strengths

 

Private equity firms hire the best and brightest minds within the investment industry in order to make investments that are profitable in any economic climate. The margins generated from investments are extremely high and are recurring in nature. The barriers for entry for a new private equity firm is moderate. These companies, depending on how much capital they are raising, must be licensed by FINRA as well as with varying state securities regulators. The ongoing registration expenses are somewhat high. The other benefit for a private equity firm is that once they are established, profitability tends to increase substantially as they acquire additional rounds of capital for their investment operations. The ongoing operating costs, outside of payroll expenses, is relatively low. Private equity fund managers generally receive a fee equal to 20% of all profits generated.

 

Weaknesses

 

Over the past twenty years, the number of people operating private equity firms has increased substantially. This is due to the fact that these companies generate very large fees for their services. The demand among pension funds and large corporations to have access to companies that can place their capital in profitable investments is significant. As such, a number of highly talented money managers has entered this field. It should be noted that one of the primary weaknesses of these businesses is that regulations are expected to remain stringent.

 

Opportunities

 

Private equity firms increase their revenues by cashing out investments, reinvesting capital provided by investors, as well as by acquiring additional rounds of capital in order to further fuel the growth of these entities. Many fund managers often launch new limited partnerships every two to three years in order to have greater access to capital.

 

Threats

 

Regulatory issues are always a continued threat for most private equity firms. However, there are currently only a limited number of legislation pieces that would impact the way that private equity firms operate. Generally, these regulations simply call for greater disclosures for investors. Competitive issues are a minor threat to a private equity firm once a strong track record is established.


Be sure to take a look at our Business Plan Templates.