Private Equity | Investor's Almanac

Private equity (PE) represents ownership stakes in companies not traded on public stock exchanges. PE investments are illiquid, demanding long-term commitment and offering the potential for significant returns through strategic exits like initial public offerings (IPOs) or sales to other companies. The industry encompasses various strategies, from leveraged buyouts (LBOs) that use substantial debt to acquire companies, to growth capital investments funding expansion, and distressed debt investing targeting troubled firms. The scale of private equity is immense, with global assets under management reaching trillions of dollars, making it a dominant force in capital markets and corporate governance.