DEMO — development content for layout testing. Not real editorial reporting.
DEMO content for development and layout testing — not real editorial reporting.
Investors commit capital to a fund for a fixed period; the fund manager draws it down to buy stakes in private companies, often using borrowed money.
How it works
Returns depend on improving operations, growing earnings, using debt efficiently and selling at a favourable valuation.
Private equity funds buy companies, aim to improve them and sell them on. Their model relies on leverage, governance and time.
What to watch
Critics point to fees, opacity and the risks of high leverage; supporters argue concentrated ownership improves management.
Key concepts
- Private equity
- Alternative assets
