What is Private Equity (PE)?

Private Equity (PE) is a form of investment that involves private equity in unlisted companies. Private investors will often buy part or all of a company over which they have no control, and provide support in terms of financial and management expertise.

Private equity investors buy private equity, usually with the aim of realizing substantial profits through restructuring, buyout, financial turnaround or some other form of revitalization.

Private equity takes the form of private equity relationships, direct investment, private loans and secured loans. Investors may also acquire minority stakes in existing businesses to achieve returns and better cost control.

A private equity fund is a legal entity used by institutional investors, pension funds and individuals to invest in private assets. PE funds can take the form of private equity, venture capital or seed capital.

Private equity can be an excellent form of investment for sophisticated investors who may be looking for long-term returns. Private equity investors can take risks and enjoy high returns, but also incur substantial losses if investments go wrong.