Private Equity Fundamentals



Next video:
Loading the player...

Private equity refers to company ownership by a specialized investment firm. Typically, a private equity firm will establish a fund and use it to buy multiple businesses, with the goal of selling each one within a few years at a profit.

Private equity firms will often target an underperforming business and, after purchasing the company, use their management expertise to improve profitability.

Related Articles
  1. Fundamental Analysis

    A Primer On Private Equity

    Private equity investing is becoming more accessible for individual investors; find out how you can get involved.
  2. Investing Basics

    How To Invest In Private Companies

    It can be tough to invest in a company that doesn't trade on an exchange, but there are also several advantages.
  3. Investing Basics

    How To Invest In Private Companies

    Owning a private firm means sharing more directly in the underlying firm’s profits.
  4. Financial Advisors

    Is Private Equity the Right Move Now? (PSP, PEX)

    With equities extremely volatile, does it make sense to move to private equity?
  5. Fundamental Analysis

    Should My Portfolio Include Private Equity?

    Private equity offers a lot of potential, but is it worth the risk?
  6. Active Trading Fundamentals

    Understanding the Accounting of Private Equity Funds

    Read about private equity accounting and how it is different than that of other investment vehicles. The nature of private equity makes a difference.
  7. Financial Advisors

    Coming Soon: Private Equity In 401(k) Plans

    The day will soon come when private equity is commonly found among 401(k) plan investment options. Here's who's leading the charge and what to watch for.
  8. Brokers

    Private Equity's Returns Are Tempered By Its Risks (BX, KKR)

    Private equity firms adopt approaches to quickly hike up earnings and boost returns, but these investments come with big risks too.
  9. Professionals

    3 Tips For Finding a Job in Private Equity

    Understand how difficult it is to break into the field of private equity, and increase your chances by preparing early and following these tips.
  10. Investing Basics

    Use Private Equity Strategy to Invest

    Forget trying to be a great trader. Learn to invest like private equity firms for superior results.

You May Also Like

Hot Definitions
  1. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  2. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  3. Keynesian Economics

    An economic theory of total spending in the economy and its effects on output and inflation. Keynesian economics was developed ...
  4. Society for Worldwide Interbank Financial Telecommunications ...

    A member-owned cooperative that provides safe and secure financial transactions for its members. Established in 1973, the ...
  5. Generally Accepted Accounting Principles - GAAP

    The common set of accounting principles, standards and procedures that companies use to compile their financial statements. ...
  6. DuPont Analysis

    A method of performance measurement that was started by the DuPont Corporation in the 1920s. With this method, assets are ...
Trading Center