Private Equity

Introduction to Private Equity

Private equity refers to the investment of funds into privately held companies or assets with the aim of achieving substantial returns over the long term. Unlike public equity, private equity involves direct ownership in businesses that are not listed on stock exchanges. This ownership can lead to greater influence over the company’s operations and strategic decisions.

The Key Players: Limited Partners and General Partners

In the realm of private equity, two key players come to the forefront: Limited Partners (LPs) and General Partners (GPs). Limited Partners are the investors who contribute capital to the private equity fund, while General Partners are responsible for managing the fund and making investment decisions.

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Private equity involves investing in privately held companies for significant returns.

Private equity can enhance operations, provide strategic direction, and restructure finances.

Disadvantages include loss of control, short-term focus, and exit pressure.

Yes, private equity infuses capital into businesses, fostering expansion and job creation.

Technological, regulatory, and economic changes shape the strategies and impacts of private equity firms.