What Is Private Equity? Funds, Examples, & How to Invest

Business people shaking hands.

The domain of institutional investors and very wealthy individuals.

© AmnajKhetsamtip—iStock/Getty Images

Private equity investing sounds like what it means: Investing in companies that are not publicly traded. But behind this straightforward-sounding term is a sometimes opaque investment strategy that’s limited to certain wealthy individuals and institutions, and requires investors to lock up their money for years at a time.

Private equity investing sometimes gets lumped in with other asset classes and strategies such as venture capital, hedge funds, and other alternative investments. These are all nontraditional investment types and asset classes (that is, they’re outside the world of stocks and bonds); however, there are many…

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