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(2) recapitalization - this strategy allows the private

equity firm to partly exit from the portfolio
company by having the portfolio company increases

its capital such that the firmûs shareholding therein

is diluted. However, as the firm will remain having
a stake in the portfolio company, it can tap the

growth of the company, and may fully exit the

company at a later stage;

(3) write-off - in the case where portfolio companyûs

performance is so poor that the private equity firm

wishes to walk away from its investment, it may
write-off its investment and exit the portfolio
(42)
company.

4 Strategy of Private Equity Investments

In essence, private equity investments aim at reviving or expanding

a potential business, and selling it when the time is right. To limit its

liabilities and avoid being subject to the foreign investment restriction,
private equity firms typically form an SPV in Thailand to be its

investment entity in a Thai portfolio company.

(42)
See generally POVALY, supra note 42.

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