Question

Which of the following statements about Private Equity (P

Q: Answer-Which of the following statements about Private Equity (PE) is CORRECT?

Private Equity PE refers to capital invested in companies that are not publicly listed on stock exchanges. PE funds raise capital from institutional investors pension funds, insurance companies, endowments, sovereign wealth funds and highnet-worth individuals through Alternative Investment Funds AIFs in India, regulated by SEBI not PFRDA. The investment horizon is typically 3 to 7 years. Value creation occurs through operational improvements, management changes, and strategic repositioning. Exit is achieved via IPO, strategic sale, secondary buyout, or management buyout. PE does not guarantee returns it is risk capital. It is distinct from Venture Capital early-stage startups and Hedge Funds absolute return market strategies.

E is CORRECT?

A Private equity funds raise capital exclusively from retail investors through stock exchanges

B Private equity typically involves investment in publicly listed companies to earn dividend income

C Private equity involves medium-to-long term investment in unlisted companies with the objective of value creation and exit through IPO, strategic sale, or secondary buyout

D Private equity funds guarantee a fixed rate of return to investors irrespective of portfolio performance

E Private equity is regulated by PFRDA in India

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