Private Equity
Investment Types
In Short
Private Equity involves investing capital in companies that are not publicly traded on a stock exchange. The core strategy is to acquire, actively improve, and grow these businesses over several years before selling them for a profit.
detailed Definition
Private Equity (PE) refers to capital investment in non-publicly traded companies, often broadly described as part of the private markets. At its core, private equity involves buying, growing, and eventually exiting companies for profit, typically through a sale, merger, or public listing.
Private equity investors include pension funds, endowments, specialised investment vehicles, family offices, and high-net-worth individuals. These investors commit capital to private equity funds, which are managed by General Partners (GPs) responsible for sourcing, acquiring, and actively managing portfolio companies.
Historically, private equity was accessible only to accredited investors—those who meet specific income or net worth thresholds. In recent years, however, access has broadened, with the rise of feeder funds, digital platforms, and regulatory changes making private equity increasingly available to private and semi-professional investors.
Private equity strategies can vary widely—from buyouts and growth equity to turnaround and sector-specific approaches—but all rely on active ownership and value creation to generate returns over a multi-year investment horizon.