Creating growth and prosperity

What is private equity?

Private equity is a form of professional investment that involves taking an ownership interest (equity) in a company and holding it private hands – as opposed to on a public stock exchange.

Private equity managers believe that keeping a company private allows them to focus on making positive and lasting changes to the business, rather than meeting the short-term demands of stock markets and shareholders.

Private equity is typically a medium to long-term investment. The managers are actively involved in running the business they have invested in over many years. This business is called a portfolio company.

Private equity managers raise investment funds from a range of sources, including institutional investors like pension funds, insurance groups and sovereign wealth funds, as well as private investors.

When the time is right, private equity managers sell their funds' ownership interests. This can result in healthy returns for Europe’s leading pension funds and insurers, benefitting the millions of European citizens who depend on these institutions for their retirements.