Leveraged Buyout Fund

A leveraged buyout (LBO) fund is an investment fund that acquires companies using a combination of its own capital and borrowed money. The goal is to improve the acquired company's performance and then sell it for a profit. The borrowed funds are expected to be repaid from the company's cash flow or future sale proceeds. LBO funds typically target established, stable businesses that can generate reliable income, enabling them to service the debt while aiming to increase the company's value through management improvements or strategic changes.