Private equity investments, traditionally pursued by individual investors and corporations with high net worth, have gained traction with mid-level investors in today’s uncertain economy. Through buying stock in non-public companies, investors deal on the private market, rather than through an exchange. These investments are typically highly illiquid, since private companies must make connections with potential investors on their own. Investors hope to realize, after holding their shares for a few years, significant returns on investment when the company makes an initial public offering or is recapitalized or sold.

1. By Robert Borden

2. 
Private equity investments, traditionally pursued
by individual investors and corporations with
high net worth, have gained traction with midlevel investors in today’s uncertain economy.
Through buying stock in non-public companies,
investors deal on the private market, rather than
through an exchange. These investments are
typically highly illiquid, since private companies
must make connections with potential investors
on their own. Investors hope to realize, after
holding their shares for a few years, significant
returns on investment when the company makes
an initial public offering or is recapitalized or
sold.

3. 
Some private equity funds require a base-level
investment of $250,000, while others’ requirements
can be much steeper, sometimes totaling millions of
dollars. This industry niche is dominated by larger,
professionally managed equity investment funds.
These include pension funds and other institutionbased investors, along with groups of accredited
investors. Investors who purchase private securities
can channel their funds directly into a selected
private company or can buy out a public company
with the goal of taking it private. The objective is to
secure meaningful leverage in how a company
operates.

4. 
Some of the best-known and biggest global
private equity funds trade their own shares on
public exchanges, putting investment
opportunities within the reach of ordinary
individuals. Types of private equity fund
investors include limited partners and general
partners. General partners are responsible for
managing fund performance and can be held
accountable for the conduct of the fund. Limited
partners have no day-to-day oversight
responsibilities, and their status confers
protection against loss of their initial investments
and against lawsuits targeting the fund.