1. Financial Advisory
2. Finance
3. Startup Finance
4. Private Equity

What is Private Equity?

Private equity is a large segment of the securities investment market which concentrates on putting their investments into businesses that are not yet public, Private equity generally operates with pools of money so that the managers are able to spread the funds across a variety of industries and businesses. The investors in these deals often accept a passive limited partnership role in return for long term gains. This investment is typically illiquid for many years to give the companies a chance to grow.

Another feature of private equity investing in a pool is the concept of a capital call. Upon investment, the investor commits to a total amount of money, typically $500,000. Initially, however, the private equity partners will only draw down or take, a third of this total, reserving the right to take the full amount during successive years. This demand for more of the committed capital is termed a capital call.