Private Equity

Private equity, meaning any equity capital that is not quoted on a public exchange, is an investment pool that serves to negotiate purchases of common and preferred stocks, subordinate debt, convertible securities and other securities of companies. It consists of investors and funds that make direct investments into private companies or orchestrate buyouts of public companies. Most private equity consists of institutional and accredited investors who commit large sums of money for extended periods of time to allow for improvements to a company in financial distress or a liquidity event such as a sale to a public company. Private equity firms will often facilitate leveraged buyouts, whereby large sums of debt are given to fund a sizeable purchase in a bid to improve a company’s financial status and increase is resale potential.