Private Equity
Private Equity Meaning:
The term Private equity is type of investment that targets companies that are not listed on a public stock exchange. It is considered an alternative investment class with direct investment in non public equity been made through venture capital firms, private equity firms and angel investors. It is a specialized type of investment with institutional and high networks where firms raise a fund through money from a variety of sources such institutional investors or high net worth investors. The purpose of private equity is that it may achieve a high rate of return over a planned period than less risky investments than other asset classes. While the private equity term usually refers to investments in mature companies, to help fund their future growth, it may also include distressed funding and leveraged buyouts. Venture capital is also another form of private equity that aims to invest in companies that have a potential to grow fast and provide a potential high rate of return. Compared to some other asset classes it is considered quite risky but also offers potential to be lucrative.
The term Private equity is type of investment that targets companies that are not listed on a public stock exchange. It is considered an alternative investment class with direct investment in non public equity been made through venture capital firms, private equity firms and angel investors. It is a specialized type of investment with institutional and high networks where firms raise a fund through money from a variety of sources such institutional investors or high net worth investors. The purpose of private equity is that it may achieve a high rate of return over a planned period than less risky investments than other asset classes. While the private equity term usually refers to investments in mature companies, to help fund their future growth, it may also include distressed funding and leveraged buyouts. Venture capital is also another form of private equity that aims to invest in companies that have a potential to grow fast and provide a potential high rate of return. Compared to some other asset classes it is considered quite risky but also offers potential to be lucrative.
Private Equity firms like the Carlyle Group and TPG Capital provide a vehicle for this alternative asset class with a fund to allow investors to gain access to these non listed companies, with access to these companies may also be limited not disclosed to the general public. These firms specialize in seeking out deals who will then provide access to their investor/fund to consider.
For example Peter Thiel as an early investor in the company Facebook, he invested $500,000 which then he was able to liquidate at 400 million post IPO.