What is Growth Equity?
Growth equity is a segment of the private equity industry. Growth equity investors focus on creating value through profitable revenue growth within their portfolio comapanies. Research performed by Cambridge Associates shows that the growth equity asset class is outperforming venture capital over historical three (3), five (5) and ten-year investment periods. Cambridge and other large institutional investors increasingly recognize growth equity as a private equity asset class that is separate and distinct from venture capital and leveraged buyouts. Growth equity can be better understood by evaluating its return profile, risk characteristics, and the profile of companies that receive growth equity investments relative to the venture capital and leveraged buyout asset classes.