All Topics  
Private equity

 

 
   Email Print
   Bookmark   Link
 

 

Private equity
 
 
  Topics Private equity Topic Home

In finance
Finance

The field of finance refers to the concepts of time, money and risk and how they are interrelated. Banks are the main facilitators of funding through the provision of credit, although private equity, mutual funds, hedge funds, and other organizations have become important....
, private equity is an asset class consisting of equity
STOCK

Software for fixed assets management and stock control developed in 2004. Stocktaking process is carried using a hand-held mobile terminal equipped with barcode reader or RFID technology....
 securities in operating companies that are not publicly traded on a stock exchange
Stock exchange

A stock exchange, securities exchange or bourse is a corporation or mutual organization which provides "trading" facilities for stock brokers and trader s, to trade stocks and other security ....
. Investments in private equity most often involves either an investment of capital into an operating company or the acquisition
Mergers and acquisitions

The phrase mergers and acquisitions refers to the aspect of corporate strategy, corporate finance and management dealing with the buying, selling and combining of different corporation that can aid, finance, or help a growing company in a given industry grow rapidly without having to create another business entity....
 of an operating company. Capital for private equity is raised primarily from institutional investor
Institutional investor

Institutional investors are organizations which pool large sums of money and invest those sums in companies. They include banks, insurance companies, retirement or pension funds, hedge funds and mutual funds....
s.

There is a wide array of types and styles of private equity and the term private equity has different connotations in different countries.

Among the most common investment strategies in private equity include leveraged buyout
Leveraged buyout

A leveraged buyout occurs when a financial sponsor acquires a controlling interest in a company's ownership equity and where a significant percentage of the purchase price is financed through leverage ....
s, venture capital
Venture capital

Venture capital is a type of private equity capital typically provided to early-stage, high-potential, Growth investing companies in the interest of generating a return through an eventual realization event such as an IPO or mergers and acquisitions of the company....
, growth capital
Growth capital

Growth capital is a type of private equity investment, most often a minority investment, in relatively mature companies that are looking for capital to expand or restructure operations, enter new markets or finance a significant acquisition without a change of control of the business....
, distressed investments
Distressed securities

Distressed securities are security of companies or government entities that are either already in default, under bankruptcy protection, or in distress and heading toward such a condition....
 and mezzanine capital
Mezzanine capital

Mezzanine capital, in finance, refers to a subordinated debt or preferred equity instrument that represents a claim on company's assets, which is senior only to that of the Stock....
.






Discussion
Ask a question about 'Private equity'
Start a new discussion about 'Private equity'
Answer questions from other users
Full Discussion Forum



Encyclopedia


In finance
Finance

The field of finance refers to the concepts of time, money and risk and how they are interrelated. Banks are the main facilitators of funding through the provision of credit, although private equity, mutual funds, hedge funds, and other organizations have become important....
, private equity is an asset class consisting of equity
STOCK

Software for fixed assets management and stock control developed in 2004. Stocktaking process is carried using a hand-held mobile terminal equipped with barcode reader or RFID technology....
 securities in operating companies that are not publicly traded on a stock exchange
Stock exchange

A stock exchange, securities exchange or bourse is a corporation or mutual organization which provides "trading" facilities for stock brokers and trader s, to trade stocks and other security ....
. Investments in private equity most often involves either an investment of capital into an operating company or the acquisition
Mergers and acquisitions

The phrase mergers and acquisitions refers to the aspect of corporate strategy, corporate finance and management dealing with the buying, selling and combining of different corporation that can aid, finance, or help a growing company in a given industry grow rapidly without having to create another business entity....
 of an operating company. Capital for private equity is raised primarily from institutional investor
Institutional investor

Institutional investors are organizations which pool large sums of money and invest those sums in companies. They include banks, insurance companies, retirement or pension funds, hedge funds and mutual funds....
s.

There is a wide array of types and styles of private equity and the term private equity has different connotations in different countries.

Among the most common investment strategies in private equity include leveraged buyout
Leveraged buyout

A leveraged buyout occurs when a financial sponsor acquires a controlling interest in a company's ownership equity and where a significant percentage of the purchase price is financed through leverage ....
s, venture capital
Venture capital

Venture capital is a type of private equity capital typically provided to early-stage, high-potential, Growth investing companies in the interest of generating a return through an eventual realization event such as an IPO or mergers and acquisitions of the company....
, growth capital
Growth capital

Growth capital is a type of private equity investment, most often a minority investment, in relatively mature companies that are looking for capital to expand or restructure operations, enter new markets or finance a significant acquisition without a change of control of the business....
, distressed investments
Distressed securities

Distressed securities are security of companies or government entities that are either already in default, under bankruptcy protection, or in distress and heading toward such a condition....
 and mezzanine capital
Mezzanine capital

Mezzanine capital, in finance, refers to a subordinated debt or preferred equity instrument that represents a claim on company's assets, which is senior only to that of the Stock....
. In a typical leveraged buyout transaction, the private equity firm buys majority control of an existing or mature firm. This is distinct from a venture capital or growth capital investment, in which the private equity firm typically invests in young or emerging companies, and rarely obtain majority control.

Types of private equity

Private equity investments can be divided into the following categories:

Leveraged buyout