Private Equity.

Private equity refers to ownership stakes in companies that are not listed on public stock exchanges, typically held through partnerships funded by institutional investors and accredited high-net-worth individuals. PE firms raise capital into closed-end funds, acquire companies (often using significant debt in leveraged buyouts), work to improve operations or grow revenues, and exit via IPO or sale — usually over a 5–10 year horizon. Returns can exceed public-market benchmarks but come with illiquidity, high minimum investments, and manager-selection risk. Most retail investors gain indirect exposure through pension funds and endowments.