where do private equity firms get their money
Private equity Private equity typically refers to investment funds organized as limited partnerships that are not publicly traded and whose investors are typically large institutional investors, university endowments, or wealthy individuals. Private equity firms are known for their extensive use of debt financing to purchase companies, which they restructure and attempt to resell for a higher value. Debt financing reduces corporate tax burdens and is one of the principal ways in which private equity firms make business more profitable for investors.[1] Private equity might also create value by overcoming agency costs and better aligning the incentives of corporate managers with those of their shareholders.
Joint-stock company A joint-stock company is a business entity in which shares of the company's stock can be bought and sold by shareholders. Each shareholder owns company stock in proportion, evidenced by their shares (certificates of ownership).[1] Shareholders are able to transfer their shares to others without any effects to the continued existence of the company.[2]