Demystifying Private Equity: How It Works and What to Expect
Private equity can seem mysterious if you're on the outside looking in, but once you break it down, the model is fairly straightforward. It’s a way for investors to take ownership in private companies, often with the goal of improving performance and eventually selling at a profit. If you're considering stepping into private equity—either as an investor, advisor, or operator—understanding the mechanics will help you navigate the space with more confidence. In this article, you'll get a clear look at how private equity works, who’s involved, how deals are structured, and what you can expect along the way. What Private Equity Actually Means Private equity refers to investments made directly into private companies or public companies that are taken private. These investments are usually managed by private equity firms that raise capital from institutional investors, family offices, and high-net-worth individuals. As an investor, you wouldn’t typically invest directly into a c...