Private Equity

Throughout the history of the modern corporation, individual investors and financiers have been willing to commit significant minority equity capital to well managed companies with attractive long-term prospects. During the late 1980s, a few Wall Street investment firms began to institutionalize this style of investing by organizing special-purpose limited partnerships, which would provide equity on a non-controlling basis to medium-sized companies through private transactions. For many reasons, a company would favour raising equity capital privately as opposed to effecting a more traditional public stock offering. One principal reason that a company might find private equity a more attractive proposition is the uncertainty associated with raising equity through the public markets.

A company seeking to raise equity publicly has to face the uncertainty surrounding the typical underwritten offering: it does not know whether investors will positively receive the entire offering, or how the offering will be priced until the end of this long process. Private equity on the other hand has the advantage of confidentiality, speedy investor response relative to the public markets and the benefit of dealing with a single experienced investor as opposed to many institutional investors. Private equity investors generally have longer investment horizons than most public holders and are willing to support management's long-range strategic goals actively.

SEM manages private equity funds to provide private equity for small and medium sized enterprises. SEM private equity funds may be general-purpose equity funds or may be specialized funds targeted to a particular sector of the economy such as real estate. An Investment Committee to which the participants in the fund are eligible to participate manages each fund.

For more information email: capital@semfinancial.com