Private Equity (PE)

Private equity (PE) refers to investments in privately held companies. There are significantly more private companies than the few thousand publicly traded ones out there. The PE universe is encompassing millions of businesses, from startups and small enterprises to more established firms that have chosen not to go public. Though conceptually similar to equity securities in publicly traded companies, private equity investments are distinct enough in form and characteristics to be considered a separate asset class.
Private equity investments are high-risk and less liquid compared to public market investments, but they offer the potential for substantial returns due to their investment nature. Typical exit strategies for investors include initial public offerings (IPOs), sales to strategic buyers or secondary buyouts. Retail investors can invest in private equity via certain ELTIFs.