formal5K

Private equity

UK //ˈpraɪ.vət ˈɛ.k.wɪ.ti//US //ˈpraɪ.vɪt ˈɛ.kwɪ.ti//

Definition

Investment in private companies aiming for profit, often involving significant ownership stakes.

In simple words: Money invested in private companies that are not on the stock market.

Examples

  • The firm specializes in private equity investments across various industries.
  • Many entrepreneurs seek private equity to expand their businesses without going public.
  • Private equity firms often restructure companies to increase profitability.
  • Investors in private equity expect high returns but also assume greater risks.
  • He decided to transition from public finance to a career in private equity.

Usage notes

Commonly used in business and finance contexts. Typically appropriate in formal discussions, reports, or academic writing. Avoid using in casual conversations.

Grammar pattern

standalone noun phrase

Memory hint

Think of private equity as 'private money for private businesses.'

Collocations

  • private equity fund
  • private equity firm
  • private equity investment
  • private equity market
  • private equity deal

Synonyms

  • venture capital
  • buyout
  • investment
  • capital funding
  • equity financing

Common mistakes

  • Confused with 'public equity' which refers to shares traded on stock exchanges.
  • Misunderstanding that it only relates to startups; private equity also includes established companies.