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Private Equity
Definition
Private equity is simply an ownership interest in a privately held (non-publicly traded) company.
Using the term Private Equity :
Private equity investments can take a variety of forms, but a primary characteristic is a lack of liquidity when compared with publicly traded securities. It can be very difficult to exit a private equity position if the economic climate is difficult.
Pay Special Attention To :
The illiquidity of these investments is a large risk. Another big risk is the occasional use of a very large amount of debt (or leverage) as an attempt to improve returns. In good climates, this may work well; however, in tough credit markets, such a strategy may be very risky.
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Related terms
venture capital , venture capitalist
'Private Equity' appears in the definitions of these other terms:
Alternative Investments EBITDA Public Equity
