Private Equity

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Related to Private-equity: private-equity firm

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 ?
"Digitisation is not something that can simply be solely imposed by private-equity investors," said Erwan Colder, PwC Partner and Middle East Private Equity Leader.
In 2010, Axa Private Equity purchased a portfolio of USD1.9bn in private-equity funds from Bank of America (NYSE:BAC).
By far, most private-equity money still comes from Europe and the United States.
For novices and experienced investors alike, achieving a better understanding of the complexities of private-equity investing may prove easier with this in-depth resource at your side.
Since 1994, companies with holdings in the private-equity market have made deals for Sealy, Simmons, Serta and--in the most recent transaction--Spring Air.
Montpelier Re, Endurance Speciality, DaVinci Re, Axis Speciality, Allied World and Arch Capital all were either formed in part or helped to expand their businesses by private-equity' funding.
Tower Records, Intuit (Japan) and many others have recently gained "independence" from their parents by forming MBOs with private-equity funds.
Florin will head ADIA's emerging markets private-equity team, according to three people familiar with the matter cited by Bloomberg.
Citigroup (NYSE: C) is set to sell a portfolio of over USD900m worth of private-equity investments to Lexington Partners Inc, The Wall Street Journal has reported, citing people familiar with the situation.
House Financial Services Committee conducted a hearing in May to examine the effect of private-equity financing on workers and firms.