What is private equity?

Private equity refers to investments made in private companies or assets that are not publicly traded on a stock exchange. Private equity firms typically pool capital from institutional investors, such as pension funds, endowments, and wealthy individuals, and use that capital to invest in private companies or buyouts of public companies. Private equity investments can take the form of equity or debt, and the firms that make these investments are often involved in managing and growing the companies in which they invest. Private equity is known for its active management approach and its focus on improving the performance of companies to generate returns for investors.