Private Equity: The monicker private equity, as used in the middle market arena, typically refers to private investment funds, managed by very well qualified management teams. These funds invest in leveraged buyouts (LBOs) and management buyouts (MBOs), providing management teams and other would be acquirers with financial partners to provide the equity capital required to complete a transaction.
You may want to think of private equity funds as late stage venture capital funds, but it should be noted that the name private equity is sometimes applied to the broader industry of private equity and venture capital. In one transaction we did recently, one fund that invested styled itself as a venture fund and the other styled itself as a private equity fund, suggesting the blurry line between venture capital and private equity.
Private equity funds use a variety of other names, including "buyout funds" and "merchant banks." Some of the most well know funds include Kohlberg, Kravis and Roberts (KKR) and Bain Capital.
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