What is Private Equity?

Definition

Private Equity refers to investments made by specialised investment firms into privately owned companies or public companies that are taken private. Private equity investors typically provide capital, strategic support and operational expertise with the objective of increasing the value of their investments over time.

Private equity strategies include leveraged buyouts, growth capital, minority investments and sector-focused investments. Returns are generally generated through a combination of revenue growth, operational improvements, multiple expansion and successful exits.

Private equity plays an important role in supporting business growth, succession planning and corporate transformation.

Why it matters

Private equity provides companies with capital and expertise to accelerate growth, execute strategic initiatives and create long-term value.

In practice

Private equity investors often work closely with management teams to implement value creation plans, improve operational performance and prepare companies for future exits.