Who invests in ethanol plants and how is it done?
A. There are several ways to invest. Two of the most common are buying stock in a publicly-traded ethanol company or as a private investor. The reason private capital is necessary is that many banks are cautious and private investment lowers lending risks, says Iowa State University researcher David Swenson. Many existing companies seek capital through a bundle of investors, or they might take their chances on the stock market and let the potential earnings value of their company determine stock price, Swenson says. Some invest via hedge funds partnerships among a select number of investors who use high-risk techniques in order to make potentially extraordinary returns.
