Private equity is a type of investment where capital is pooled from investors to acquire partial or full ownership of a company, often one that is established but underperforming or in need of growth support.

These investments are usually made by private equity firms, which aim to improve the company’s operations, increase profitability, and eventually sell the business for a profit. Private equity may involve taking companies private, restructuring operations, and providing strategic guidance or funding for expansion.

Unlike publicly traded investments, private equity is not listed on stock exchanges and usually requires long-term commitment. Investors often gain significant influence over business decisions, making private equity a hands-on and strategic investment approach.