Private equity facts for kids
Private equity is investment in shares outside a stock exchange.
Investors, often from institutions like funds, give a company money, and in turn buy part of that company. The most common types of private equity are: leveraged buyouts, venture capital, growth capital, distressed investments and mezzanine capital.
In leveraged buyouts, investors buy the majority control of a mature company. In venture capital or growth capital investment, investors give money to start-up companies.
Images for kids
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Diagram of the basic structure of a generic leveraged buyout transaction
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Diagram of a simple secondary market transfer of a limited partnership fund interest. The buyer exchanges a single cash payment to the seller for both the investments in the fund plus any unfunded commitments to the fund.
See also
In Spanish: Capital inversión para niños
