Private equity, generally speaking, is an equity (stock) investment in a privately-held company. My blog post “LP Corner: What is Private Equity?” provides an overview of how the term “private equity” is used. This post is going to explore the “equity” component of “Private Equity.” This post is a complement to my posts "LP Corner: What is Private Equity" and "LP Corner: The "Private" in Private Equity".
Let’s start with a basic definition of equity: Equity is the most basic form of ownership in a company. Since virtually all private equity-backed companies in the United States are corporations, we are going to focus on equity in a corporation.
Let’s start with a basic definition of equity: Equity is the most basic form of ownership in a company. Since virtually all private equity-backed companies in the United States are corporations, we are going to focus on equity in a corporation.
