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About private equity

Building better businesses


Private equity makes long-term investments into small, medium and large companies with the aim of making them bigger, stronger and more profitable.

Specialist investment managers with intimate knowledge of running companies help to build better businesses by strengthening management, improving operations and expanding into new markets. The profits of the improvement are shared among the underlying investors and the specialists whose skills contributed to the company's success.

Venture capital is private equity investment that is focused on start-up companies. VCs back entrepreneurs who have bright ideas but need finance and expertise to get their companies off the ground and grow.

What is private equity?

Private equity is a form of professional investment that involves taking an ownership interest (equity) in a company and holding it private hands – as opposed to on a public stock exchange.

Private equity managers believe that keeping a company private allows them to focus on making positive and lasting changes to the business, rather than meeting the short-term demands of stock markets and shareholders.

Private equity is typically a medium to long-term investment. The managers are actively involved in running the business they have invested in over many years. This business is called a portfolio company.

Private equity managers raise investment funds from a range of sources, including institutional investors like pension funds, insurance groups and sovereign wealth funds, as well as private investors.

When the time is right, private equity managers sell their funds' ownership interests. This can result in healthy returns for Europe’s leading pension funds and insurers, benefitting the millions of European citizens who depend on these institutions for their retirements.

th_what-is-private-equity.jpg What is private equity video (02:21)

How does private equity and venture capital work?

Private equity and venture capital provides capital and expertise for businesses, giving them all the tools they need to grow and prosper.

Through private equity, institutional investors, such as pension funds and insurance companies, can invest in private companies that have the potential to deliver strong returns over the long run.

The impact of private equity 

The active management that private equity and venture capital brings to its portfolio companies helps them to become more successful businesses with stronger, more sustainable futures.

Th Impact For Businesses

Impact for businesses

Private equity supports the ambitions of privately-held companies by providing them with capital, and active hands-on management support.

Th Impact For Investors

Impact for investors

Private equity creates investment growth for a wide range of investors including pension funds and insurance companies, delivering strong returns for their beneficiaries.

Th Impact For Society

Impact for society

By helping build better businesses private equity has a profound impact on the economy and society, creating jobs, developing new skills, and investing in new technology.

A Different Angle: Funding people, with purpose

‘A Different Angle’ is an online film series exploring the role of private equity and venture capital in European society. This unique film series, presented by Invest Europe, the world’s largest association of private capital providers, and produced by BBC StoryWorks Commercial Productions, brings to screen the human stories at the heart of the businesses that are driving change and fuelling growth through private capital.

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