What are Private Equity and Private Equity Firms?

Private equity in finance is an asset class having equity securities in operating those companies that are not publicly traded on a stock exchange. In private equity, investments include either the acquisition of an operating company or an investment of capital into an operating company. For private equity, Capital equity is increased from institutional investors. In different countries, private equity has different meanings. There are several of styles and types private equity.

In private equity, the most common investment strategies involve venture capital, leveraged buyouts, growth capital, mezzanine capital and distressed investments. The private equity firm buys majority control of an existing or mature firm in a typical leveraged buyout transaction. This is absolutely different from growth capital investment or a venture capital where the private equity firms invests in emerging or companies and rarely gains majority control.

Types or categories of private equity: Private equity investments are of following types:

•    Leveraged buyout
•    Growth capital
•    Venture capital
•    Private equity firms

Private equity firms

TPG is the largest private equity firm in the world today according to 2009 ranking that industry magazine Private Equity International has created on the basis of the amount of private equity direct-investment capital raised over a five-year window. The ten largest private equity firms in the world ranked by the PEI 300 are as follows:

1)    TPG
2)    Goldman Sachs Principal Investment Area
3)    The Carlyle Group
4)    Kohlberg Kravis Roberts
5)    Apollo Global Management
6)    Bain Capital
7)    CVC Capital Partners
8)    The Blackstone Group
9)    Warburg Pincus
10)    Apax Partners

As continuously, private equity firms are in the process of investing, raising and distributing their private equity funds, therefore, I think capital raised can be the easier to measure.