Risk versus reward in private equity

July 2007
ICIS Chemical Business;7/30/2007, Vol. 272 Issue 5, p7
Trade Publication
The article presents comments on how the risk is limited in private equity and the reward many times greater, fueled by leverage in the Chemical industry. It informs that despite the high level of risk with increasing debt financing and higher prices paid for chemical assets, the rewards are skewed towards higher payouts. It is reported that private equity puts down only a fraction of the total purchase price while borrowing the rest, which makes its risk limited, and its upside magnified.


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