Direct Investments in Stocks
Direct investments in stocks are investments made without financial intermediaries (only theoretically). It means an investor buys stock directly from the company without intermediation of stock exchange or brokerage firm.
Direct investment in stocks usually is made in large stakes of the company with significant role in company’s management (not necessary a control of it). A lot of investments made by private equity funds are direct investments. Private equity funds provide a capital for companies and try to make companies’ activity much more effective. When profits and the value of the company increase such stocks are sold with a profit.
Direct investment is possible not only in securities but also direct investment in tangible assets without help of securities.
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