Private Equity

Private Equity is a type of investment. It means that someone is investing money in a company, usually in exchange for a share of ownership in that company. Think of it like buying a house. Just like you can buy a house and become the owner, when someone invests money in a company they become a part owner of that company. An example of private equity is when a group of investors give money to a start-up business. The investors become the owners of the business, and can help the business grow by using their experience and resources. Private Equity investments are usually for long-term investments, meaning that the investor won’t get their money back for a few years. Private Equity investments can be riskier than other investments, like stocks, but they usually have the potential for greater rewards. Fun Fact: In 2020, Private Equity investments reached a record high of $637 billion in the US, according to data from the Wall Street Journal.