哲人石 Philosopher's Stone

Private equity is a broad term that commonly refers to any type of equity investment in an asset in which the equity is not freely tradeable on a public stock market. More accurately, private equity refers to the manner in which the funds have been raised, namely on the private markets, as opposed to the public markets. Private equity firms were commonly misunderstood to invest in assets which were not in the public market. However this is not necessarily the case---larger private equity firms such as KKR, Blackstone, etc. invest in companies listed on public exchanges and take them private. Passive institutional investors may invest in private equity funds, which are in turn used by private equity firms for investment in target companies. Categories of private equity investment include leveraged buyout, venture capital, growth capital, angel investing, mezzanine capital and others. Private equity funds typically control management of the companies in which they invest, and often bring in new management teams that focus on making the company more valuable.

As they are not listed on an exchange, a private equity firm owning such securities must find a buyer in the absence of a traditional marketplace such as a stock exchange. The "exit" or "selling out" is often achieved by way of an initial public offering (IPO), i.e. floating the company on a stock exchange, trade sale or secondary/tertiary buy-outs (i.e. sale to another private equity house).