What is Private Equity Investment?
By J.B. Bird Since 1991, the private equity market has undergone massive growth, raising record levels of capital each year over the last decade. The sector hit a lull at the end of 2000, partly to catch its breath, but private equity continues to play a major role in the economy, and promises to be a major factor in global expansion over the next quarter century. So, what is private equity? Outside of the investment world, few people can describe it with confidence. Thanks to the Internet, once-arcane venture capital terms like angel investor are now known to the masses, but non-venture private equity remains a mystery to most. The phrase itself has only been in common use since about 1990. By then, most leveraged buyout firms LBOs had revised their business plans from the buy and bust tactics made famous by Michael Millken to the buy and build strategies now common among top firms like Kohlberg, Kravis & Roberts, Forstmann Little & Co, and Hicks, Muse, Tate & Furst Incorporated. The
