Private equity is a source of investment capital from high net worth individuals and/or institutions provided in return for an equity stake in potentially high growth unquoted companies. It can be medium or long-term finance.
Private equity investing may broadly be defined as investing in securities through a negotiated process. Private equity firms generally receive a return on their investment through an initial public offering (IPO), a recapitalization, or a sale or merger of the company they control.
The minimum amount of capital required varies depending on the firm and fund raised. Some funds have a $250,000 minimum investment requirement; others can require millions of dollars.
- What Is Private Equity?. Investopedia.