Private Equity

Private Equity
Equity capital that is not quoted on a public exchange. Private equity consists of investors and funds that make investments directly into private companies or conduct buyouts of public companies that result in a delisting of public equity. Capital for private equity is raised from retail and institutional investors, and can be used to fund new technologies, expand working capital within an owned company, make acquisitions, or to strengthen a balance sheet.

The majority of private equity consists of institutional investors and accredited investors who can commit large sums of money for long periods of time. Private equity investments often demand long holding periods to allow for a turnaround of a distressed company or a liquidity event such as an IPO or sale to a public company.

The size of the private equity market has grown steadily since the 1970s. Private equity firms will sometimes pool funds together to take very large public companies private. Many private equity firms conduct what are known as leveraged buyouts (LBOs), where large amounts of debt are issued to fund a large purchase. Private equity firms will then try to improve the financial results and prospects of the company in the hope of reselling the company to another firm or cashing out via an IPO.

Investment dictionary. . 2012.

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  • Private Equity — (deutsch Außerbörsliches Eigenkapital) ist eine Form des Beteiligungskapitals, bei der die vom Kapitalgeber eingegangene Beteiligung nicht an geregelten Märkten (Börsen) handelbar ist. Die Kapitalgeber können private oder institutionelle Anleger… …   Deutsch Wikipedia

  • Private-Equity — (deutsch Außerbörsliches Beteiligungskapital) ist eine Form des Beteiligungskapitals, bei der die vom Kapitalgeber eingegangene Beteiligung nicht an geregelten Märkten (Börsen) handelbar ist. Die Kapitalgeber können private oder institutionelle… …   Deutsch Wikipedia

  • private equity — A term which covers a range of transactions in which the source of finance is usually a fund established to invest specifically in unquoted securities rather than in publicly quoted securities or government bonds. The range of transactions… …   Law dictionary

  • private equity — ➔ equity * * * private equity UK US noun [U] ► FINANCE company shares that are not available for sale on a stock market: »Some public companies have been bought out by private equity firms …   Financial and business terms

  • private equity — ˌprivate ˈequity 8 [private equity] noun uncountable (finance) investment made in a company, usually a small one, whose shares are not bought and sold by the public • private …   Useful english dictionary

  • Private equity — In finance, private equity is an asset class consisting of equity securities in operating companies that are not publicly traded on a stock exchange. There is a wide array of types and styles of private equity and the term private equity has… …   Wikipedia

  • Private equity — Capital investissement Le capital investissement est une activité financière consistant pour un investisseur à entrer au capital de sociétés qui ont besoin de capitaux propres. Le terme de capital investissement concerne généralement l… …   Wikipédia en Français

  • private equity — UK [ˌpraɪvətˈekwɪtɪ] / US noun [uncountable] business money invested in private companies whose shares cannot be bought on the stock exchange a private equity firm private equity investment funds …   English dictionary

  • Private Equity — eine Private Equity Finanzierung stellt im Normalfall eine mittel bis langfristige Eigenkapitalfinanzierung eines i.d.R. nichtbörsennotierten Unternehmens in einer fortgeschrittenen Entwicklungsphase dar. Findet die Finanzierung in einer frühen… …   Lexikon der Economics

  • private equity —   Acquisizione di partecipazioni in società non ancora quotate da parte di investitori istituzionali …   Glossario di economia e finanza