Private equity funds invest in unlisted companies and generally remain invested for three to seven years before exiting with the objective of making significant profits on their initial investments. Most exits occur through stock listings, mergers, sale, or recapitalization. Venture funds invest in early stage companies while firms like monument capital group holdings invest in mature businesses. Additional PEGs contribute funds as a combination of equity and debt for maximum benefits.
Most funds consider some important features in their investee companies. These include a strong management team, clearly defined exit route, cash generation capabilities, ability for 
value creation, and huge growth prospects. Private equity funds adopt numerous strategies to create value among the portfolio companies.
value creation, and huge growth prospects. Private equity funds adopt numerous strategies to create value among the portfolio companies.
A common strategy is the acquisition of a platform business and then acquiring additional companies that are smaller but complementary to the primary acquisition. The synergies through such acquisitions develop an operational and financially efficient larger organization.
A majority of funds like https://www.linkedin.com/company/monument-capital-group-holdings-llc utilize debt for increasing return on the invested capital. The leverage is often determined by the 
target company’s capability of servicing the debt through positive cash flows.
target company’s capability of servicing the debt through positive cash flows.
Sometimes, because large amounts of debt are taken post PE investing, the cash flows during the initial years are often used to repay these amounts. Another reason for PEGs to focus on cash flows is to generate additional money needed to grow the business.
Returns made by private equity funds are through annual cash flows and the capital growth achieved at the time of exit. Liquidity event allows the investors to monetize their investment. Among the larger funds, the exit value is very crucial because the compensation received by the top management is often linked to the returns made through such liquidation and is known as “carry”. The money received on exit is used for further acquisitions until the end of the fund life.
Monument Capital Group Holdings
