Private equity (PE) refers to investment funds, typically from institutional investors and wealthy individuals, used to acquire or invest in private companies or to take public companies private. PE firms often seek to improve operations and sell at a profit.

Strategies include leveraged buyouts, growth capital, and distressed investments. PE firms may hold investments for several years, restructure management, and exit through sale or IPO. It differs from venture capital in focusing on more mature companies.

Key points

• Investment in private or taken-private companies
• Includes leveraged buyouts and growth capital
• Seeks operational improvement and profit
• Focuses on mature companies