What is private equity?
Private equity is investment in private companies, i.e, companies that are not publically listed or traded. Through private equity, institutional investors and high net worth individuals make investments into businesses in exchange for equity in the hope that the value of the company will increase and they'll see a return on investment (ROI). PE investors usually take a majority stake when they invest, and it tends to be in mature companies in traditional industries. For these reasons, a large capital outlay is often necessary.
Investors who pay into private equity funds do so with the aim of earning better returns than can be gained in public equity markets.
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