Marketing Ideas

Most institutional investors do not invest directly in privately held companies, as these companies oftenlack expertise and resources necessary to structure and monitor the investment. Instead, most institutional investors invest indirectly through a private equity fund. Certain institutional investors have the resources necessary to develop a diversified portfolio of private equity funds themselves, while others invest through a fund to allow a portfolio to be more diversified. Returns on private equity investments are created through one factor or a combination of three factors that may include operational improvements that increase earnings over the life of the investment and multiple expansion, debt repayment or cash accumulation through cash flows from operations,  and selling the business for a higher multiple of earnings than was originally paid. The key component of private equity as an asset class for institutional investors is that investments are typically realized after some period of time, which varies depending on the investment strategy. Private equity investments are typically realized through one of the following avenues: a merger or acquisition where the company is sold for cash or shares in another company; an Initial Public Offering or IPO where the shares of the company are offered to the public, providing a partial immediate realization to the financial sponsor as well as a public market into which it can further sell additional shares; and recapitalization where cash is distributed to the shareholders or a financial sponsor and its private equity funds either from cash flow generated by the company.

The action of private equity firms seeking capital from investors for their funds is called private equity fundraising. Capital raised can often be the easiest factor to determine the size of a private equity firm due to the fact that private equity firms are continuously in the process of raising, investing and distributing their private equity funds. In a typical scenario, an investor is likely to invest in a specific fund managed by a firm, becoming a limited partner in the fund, rather than being an investor in the firm itself. As a result, an investor benefits only from investments made by a firm through the specific fund in which it has invested.

The 2012 year started with good news for the Direct Edge and its members. Being one of the leading equities exchange operators, it could only prove its ability with such outstanding results, wining this year’ WSL institutional Awards in Trade for the Best Operating Stock Exchange, Overall. The awards were organized by Wall Street Letter, the leading trade publication.

The selection was determined after careful review, analysis and observation of a panel constituted of recognized brokerage films, independent judges, exchanges and financial institutions, for the achievements and innovation over the year 2011.

Responding during the awards, Direct Edge CEO stated of the driving force behind their success, striving to put the success of members and customers as prime focus which had made Direct Edge see this far. He also expressed the special gratitude for receiving of the award which reflected validation of the commitment the Company has to innovation and partnering with its members to move business lives to another level.

O’ Brien has been attributed to the much of the Direct Edges’ success. The day he arrived to Direct Edge in 2007, the company traded 300M shares. 1 ½ years later, the company traded 2 Billion shares. The CEO had fears though that legacy technology he’d acquired from the Knight wouldn’t fully support that rate of growth. Hence, it has to be replaced, but that has to be done while continuing with customer luring onto the legacy platform. This was a very tricky proposition that Direct Edge went through.

A savior arrived in 2008, in form of ISE where Direct Edge took the benefactor’s ISE stock exchange. In return, the ISE would acquire 31.5% of the ECN ownership this purpose held 2 significant effects;
It dropped ownership stakes of Citadel, Goldman Sachs and Knight to 19.9% making each to comply with the SEC rules which states that broker dealers can’t own more than 20% of equity exchange, which the Direct Edge Company was applying to be. It also infused the Company with an infrastructure and advanced technology. Team work, innovation and a good leadership has and will always see the Direct Edge scoop such awards.

The Direct Edge is the America’s newest stock exchange, offering next generation of displayed markets. The company utilizes two of its platforms and order types to match the complementary forms of liquidity, based on the fill rate, speed and transaction cost, while maintaining low latencies and high execution. The headquarters are based in Jersey City. Among the ownership is a corium which includes J.P Morgan and Citadel Derivatives among others.