What is Private Equity?

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Private Equity (PE) refers to investments that are not traded on regulated markets like stock exchanges. Essentially, PE involves investing in private, unlisted companies as opposed to public, listed ones. PE serves as an alternative source of funding for private companies. This broad term encompasses investments in a company's equity and its derivatives, as well as various forms of private debt. Private equity funds provide capital throughout a company's life cycle, from the early stages of a business idea to its maturity. Fund managers often specialize in niches such as venture capital, growth or development capital, buyouts (investing in established companies with proven strategies and cash flows), secondaries (acquiring stakes in ongoing PE funds), and private debt. PE investments are not limited to large companies; firms of any size can be targets. Some funds take minority stakes, while others aim for majority control. Degroof Petercam, for instance, focuses primarily on buy-out funds due to the superior risk-return profile.

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