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Private Equity

Equity capital that is not quoted on a public

exchange. Private equity consists of investors and funds that make investments

directly into private companies or conduct buyouts of public companies that result in

a delisting of public equity. Capital for private equity is raised from retail and

institutional investors, and can be used to fund new technologies, expand working

capital within an owned company, make acquisitions, or to strengthen a balance sheet.
The majority of private equity consists of institutional investors and accredited

investors who can commit large sums of money for long periods of time. Private equity

investments often demand long holding periods to allow for a turnaround of a

distressed company or a liquidity event such as an IPO or sale to a public company.