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Private equity (PE) typically refers to investment funds, generally organized as limited partnerships, that buy and restructure companies. More formally, private equity is a type of equity and one of the asset classes consisting of equity securities and debt in operating companies that are not publicly traded on a stock exchange.A private-equity investment will generally be made by a private-equity firm, a venture capital firm or an angel investor. Each of these categories of investors has its own set of goals, preferences and investment strategies; however, all provide working capital to a target company to nurture expansion, new-product development, or restructuring of the company's operations, management, or ownership.Common investment strategies in private equity include leveraged buyouts, venture capital, growth capital, distressed investments and mezzanine capital. In a typical leveraged-buyout transaction, a private-equity firm buys majority control of an existing or mature firm. This is distinct from a venture-capital or growth-capital investment, in which the investors (typically venture-capital firms or angel investors) invest in young, growing or emerging companies, but rarely obtain majority control.
Private equity is also often grouped into a broader category called "private capital", generally used to describe capital supporting any long-term, illiquid investment strategy.Bloomberg Businessweek has called "private equity" a rebranding of leveraged-buyout firms after the 1980s.To compensate for private equities not being traded on the public market, a private equity secondary market has formed, where private equity investors purchase securities and assets from other private equity investors.

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