Guide Note

Private equity describes an investment in any asset in which the shares of stock are not traded on a public stock market. It allows established businesses to invest money and management in smaller companies (often startups), allowing the smaller business to succeed while generating profit for the investing company.

Fast Facts

1. 2005: $135 billion was invested by private equity firms
2. 40% of private equity is invested in North America
3. Largest private equity deal is Blackstone's acquisition of Equity Office Properties for $38.9 billion

1. Buyout: Also known as a leveraged buyout, when a business or its assets are acquired through financial leverage.
2. Venture capital: This refers to investments in a company during its early stages, usually for development or launch of a new business.
3. Growth capital: Similar to venture capital, but for more established companies that are in need of growth or expansion.