private equity

Definition

Equity securities of companies that are not listed on a public exchange. Transfer of private equity is strictly regulated; therefore, any investor looking to sell his/her stake in a private company has to find a buyer in the absence of a marketplace. Returns on private equity generally occur in three ways: a merger or sale, an initial public offering, or a recapitalization.

Use private equity in a sentence

We had a lot of private equity in our company, which was good because we needed it badly and liked having it.

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The private equity generated by the outstanding performing firm was able to instill enough confidence in the team that the project was continued.

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Our company agreed to sell itself to a private equity company that would be able to bring us off the public market and make needed changes while being held in private hands.

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indirect investment private equity firm