Private Equity Quiz

In an LBO, what is the main source of value creation for private equity investors?

• Increase in leverage

• Reduction in interest rates by RBI

• Operational improvements and EBITDA growth

• Government subsidies

Which of these exit strategies is LEAST preferred by private equity funds in India due to regulatory challenges?

• Strategic Sale

• IPO

• Secondary Sale to another PE fund

• Liquidation

What is the typical carried interest percentage earned by General Partners (GPs) in private equity funds?

• 1%

• 10%

• 20%

• 40%

Private equity investments in India are usually made through:

• Listed Mutual Funds

• Alternative Investment Funds (AIFs)

• Government Bonds

• ETFs

Which of the following is a key feature of private equity investments?

• High liquidity

• Long investment horizon

• Guaranteed returns

• Listed on stock exchanges

Which exit route is MOST common for private equity investors in India?

• Initial Public Offering (IPO)

• Reverse Merger

• Buyback by Government

• Debt Restructuring

Which of the following statements about Private Equity is TRUE?

• PE investments are suitable for short-term gains

• PE funds are regulated under SEBI (AIF) Regulations, 2012

• PE investors generally invest in distressed assets only

• PE funds cannot invest in unlisted companies

What is a Leveraged Buyout (LBO)?

• Buying a company entirely with cash

• Acquiring a company using a significant amount of borrowed funds

• A merger of two private equity firms

• Investing in government securities

Which of the following stages of company life cycle is MOST associated with private equity funding?

• Seed Stage

• Early Stage

• Growth/Mature Stage

• Idea Stage

Which of the following is an example of a prominent private equity deal in India?

• LIC IPO

• Blackstone's acquisition of Mphasis

• SBI issuing perpetual bonds

• SEBI launching Nifty Index