Cynthia Meyer, CFA, CFP®, ChFC® , Financial Planner at Financial Finesse and researcher for What Your Financial Advisor Isn't Telling You: The 10 Essential Truths You Need to Know About Your Money.
@CynthiaMeyer
"Private equity" is an investment in the ownership of a private company, e.g., a company whose shares are not publicly traded on an exchange. "Equity" means the value of an asset minus all the liabilities against that asset. This represents the value of ownership. "Private" means that the transaction is between the investor and the company, and is not quoted on an exchange. Private equity investors are institutions, such as pension funds, hedge funds and insurance companies, as well accredited investors (high net worth individuals who meet certain criteria). Private equity investments generally have long holding periods. Generally, the goal of a private equity investor is to realize a return on the investment through the sale of the company, either to another company or to the public through a public offering of shares.
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