The time horizon for a private equity investment varies but is generally around 4 to 7 years. It includes the time needed to implement changes, improve performance, and achieve a successful exit.

Private equity firms use various methods for valuation, including discounted cash flow analysis, comparable company analysis, and precedent transactions. They also conduct thorough due diligence to understand the company's financial health and growth prospects.

The exit strategy is a crucial aspect of private equity. Firms plan for exits through methods like IPOs, mergers and acquisitions, or secondary buyouts. A well-executed exit is essential for realizing returns on the investment.