Private Equity

Private equity refers to investments made directly into private companies or buyouts of public companies to delist them from stock exchanges. Unlike public equity, private equity deals with companies that are not listed on public stock exchanges. The goal is often to improve a company’s operations, increase its value, and eventually sell it for a profit.

Private equity firms typically raise funds from investors, including wealthy individuals, pension funds, and institutional investors. They use these funds to acquire, manage, and grow businesses. The investment horizon for private equity can range from a few years to over a decade. The firms often focus on strategies such as restructuring, operational improvements, and strategic growth initiatives to enhance the value of their portfolio companies.

Investors in private equity generally seek higher returns compared to public markets, given the higher risk and longer investment period involved. Private equity plays a significant role in providing capital for companies looking to expand, innovate, or make major changes. The industry encompasses various types of investments, including venture capital, buyouts, and growth equity.