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What is private investments in public equity PIPES ?
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6th Dec 2009 by Amelia Timbers
PIPE stands for P-rivate I-investment in P-ublic E-quity. It refers to when private firms of many types- private equity, hedge funds, mutual funds, etc, make investments in publicly traded securities. While many of these large scale private investors stick to private equity or over the counter securities, sometimes they will invest in publicly held securities. In this case, large firms compete with average investors for equity. To the disadvantage of the average investor, private investors often get these assets at a discount in order for the seller to raise equity capital. However, they are easier transactions to execute than additional public offerings, and fewer regulations keep costs down.
PIPE stands for P-rivate I-investment in P-ublic E-quity. It refers to when private firms of many types- private equity, hedge funds, mutual funds, etc, make investments in publicly traded securities. While many of these large scale private investors stick to private equity or over the counter securities, sometimes they will invest in publicly held securities. In this case, large firms compete with average investors for equity. To the disadvantage of the average investor, private investors often get these assets at a discount in order for the seller to raise equity capital. However, they are easier transactions to execute than additional public offerings, and fewer regulations keep costs down.
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4th Dec 2009 In Investing
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