Private equity information

In the field of finance, private equity (PE) is capital stock in a private company that does not offer stock to the general public. Private equity is offered instead to specialized investment funds and limited partnerships that take an active role in the management and structuring of the companies. In casual usage, "private equity" can refer to these investment firms rather than the companies that they invest in.^[1]

Private-equity capital is invested into a target company either by an investment management company (private equity firm), a venture capital fund, or an angel investor; each category of investor has specific financial goals, management preferences, and investment strategies for profiting from their investments. Each category of investor provides working capital to the target company to finance the expansion of the company with the development of new products and services, the restructuring of operations, management, and formal control and ownership of the company.^[2]

As a financial product, the private-equity fund is a type of private capital for financing a long-term investment strategy in an illiquid business enterprise.^[3] Since the 1980s, the financial press describe "private equity fund" investment as the superficial rebranding of investment management companies who specialized in the leveraged buyout of financially weak companies.^[4]

In assessing the returns of private equity, scholars provide mixed assessments. Some find that private equity outperforms public equity while others find no evidence of overperformance.^[5]

^ Investments in private equity An Introduction to Private Equity, including differences in terminology. Archived 5 January 2016 at the Wayback Machine
^ "Venture Capital Investing". PrivCo. Retrieved 25 April 2022.
^ "Winning Strategy For Better Investment Decisions In Private Equity". USPEC. 5 November 2019. Retrieved 27 January 2020.
^ "Everything is Private Equity Now". Bloomberg. 3 October 2019. Retrieved 15 August 2021.
^ "Is private equity actually worth it?". Financial Times. 5 March 2024.

[1] Investments in private equity An Introduction to Private Equity, including differences in terminology. Archived 5 January 2016 at the Wayback Machine

[PrivCo.com_Private_Company_Knowledge_Bank-2] "Venture Capital Investing". PrivCo. Retrieved 25 April 2022.

[3] "Winning Strategy For Better Investment Decisions In Private Equity". USPEC. 5 November 2019. Retrieved 27 January 2020.

[:0-4] "Everything is Private Equity Now". Bloomberg. 3 October 2019. Retrieved 15 August 2021.

[5] "Is private equity actually worth it?". Financial Times. 5 March 2024.

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