Private Equity

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Private Equity

Equity shares that are not traded on a public exchange.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

Private Equity

1. Ownership in a corporation that is not publicly-traded. That is, private equity involves investing in privately held companies. Most of the time, private equity investors are institutional investors and high net-worth individuals who have a large amount of capital to commit to these investments. Private equity is usually held for a long period of time, and trading in it is useful when a company is in danger of bankruptcy, because it provides access to a great deal of capital very quickly.

2. A company that trades in private equity. Often, private equity firms band together and buy out publicly-traded companies, making them privately held.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

Private equity.

Private equity is an umbrella term for large amounts of money raised directly from accredited individuals and institutions and pooled in a fund that invests in a range of business ventures.

The attraction is the potential for substantial long-term gains. The fund is generally set up as a limited partnership, with a private equity firm as the general partner and the investors as limited partners.

Private equity firms typically charge substantial fees for participating in the partnership and tend to specialize in a particular type of investment.

For example, venture capital firms may purchase private companies, fuel their growth, and either sell them to other private investors or take them public. Corporate buyout firms buy troubled public firms, take them private, restructure them, and either sell them privately or take them public again.

Dictionary of Financial Terms. Copyright © 2008 Lightbulb Press, Inc. All Rights Reserved.
References in periodicals archive ?
Private equity investments in retail properties stood at Rs 800 crore in 2015, Rs 3,000 crore in 2016 and Rs 700 crore last calendar year, the report said.
"Private equity investment is good for dermatology," Clifford Perlis, MD, said at the annual meeting of the American Academy of Dermatology.
When evaluating potential private equity investments in growth-stage firms, advisors and their clients should make sure the companies meet the following four criteria before investing:
The Investment Funds' investment activities and investments in operating companies involve the risks associated with private equity investments generally.
When their liquidity needs or portfolio strategies change, they are eager to sell to buyers, who are mostly funds of funds, set up expressly to buy private equity investments.
Across Africa the ratio of private equity investments to GDP stood at only 0.09% in 2012, compared with 1.05% in the UK and 0.86% in the US, according to data from the Emerging Markets Private Equity Association (EMPEA).
Potential bidders include private equity firms Ares Management LLC, Bain Capital LLC, KKR & Co LP (NYSE:KKR), NPM Capital NV, Pamplona Capital Management LLP, Providence Equity Partners LLC and Waterland Private Equity Investments BV, according to the sources.
Mr Waddell said: "This transaction is one of the largest private equity investments in a Midlands-based business this year.
Adverse market conditions affected fair values and exit opportunities for their private equity investments in 2008-09, although prospects have since improved.
Across the GCC, all major financial institutions have seen massive write-downs of value of their private equity investments over the past 24 months.
Private equity investments have also regressed, from $2.72bn in 2008 to $561 million in 2009, according to the fourth annual Private Equity and Venture Capital in the Middle East report released by the Gulf Venture Capital Association (GVCA) in collaboration with KPMG and Zawya.

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