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Question: How does private equity work, and how do you become a private equity investor?

(Posted by: William M on 2009-12-19 10:30:52)

I am 18 years old and I have an interest in the idea of becoming a private equity investor if I manage to accumulate enough starting capital. How does one go about becoming a private equity investor and becoming a multibillionaire like roman abramovich of millhouse capital, or prince alwaleed bin talal of the kingdom holding company? Please could somebody help explain. Thanks.

Posted by: Matt on 2009-12-19, 11:23:43

How to become rich??? A LOT of hard work and education... A LOT!!! Private equity consists of investors and funds that make investments DIRECTLY into private companies, instead of trading through the stock market. Usually they include institutional investors (banks, hedge funds...) and rick individual investors. I think you might be interested in becoming a venture capitalist, which means you find starting businesses and invest money for a share of the business (a type of private equity investment). But before all this, you need the money, and this takes a lot of time and effort. Venture Capitalists are stereotyped as being old men and women going through a mid-life crisis while sitting on a lot of money, and therefore get excited in getting into the action by investing into a young entrepreneurs' start-up business. Otherwise, you could get an education (degree to start with) and get employed by a large financial institution (maybe even AlWaleed's), become a senior analyst and make decisions in investing the institution's private equity...maybe even a takeover! Good Luck!