What is Private Equity?
Private equity is defined as when
investment managers use a pool of capital created from private investors
to purchase private or public companies. These private investors are
comprised of high net worth individuals, hedge funds, state and
pension funds, funds of funds, insurance companies,
investment banks, and university endowments.
% Acquired: Private equity firms almost always invest and buy 100% of the company through a leveraged buyout, if not they invest in over 50% in order to gain control of the company.
Size of Investment: Private equity firms make large investments. These investments range from $100 million to the billions for larger companies.
Structure: Private equity firms use a combination of equity and debt financing.
Stage: Private equity firms invest in mature companies that have potential growth.