The Handbook of Professionally Managed Assets: A Definitive Guide to Profiting from Pooled Investments

Private Equity Funds

The world of private equity and private equity funds is potentially very lucrative (offering the potential for extremely high returns) but extremely risky (not for the faint of heart). Private equity generally buys distressed private (non-publicly traded) businesses, positions them in a fund available to wealthy investors, and attempts to turn those businesses around financially before “taking the business public”—that is, engaging in an initial public offering (IPO) of the shares. A segment of private equity firms also invests in start-up businesses and are known as venture capitalists . Because individual investors in private ...