Jurisdiction(s):
United Kingdom

Key definition

Private equity definition

What does Private equity mean? Private equity describes investment by professional funds in unlisted (unquoted) companies to obtain minority or controlling stakes, financing growth, management buy-outs/ins, recapitalisations or turnarounds, often alongside acquisition debt. The shares acquired are not admitted to trading on a stock exchange, so are less marketable and less liquid than public (quoted) equity. The term is not defined in legislation or case law; it is a market description used consistently across England & Wales, Scotland, Northern Ireland and Ireland. Transactions are privately negotiated and typically documented through investment and shareholders’ agreements, amended articles, preference shares or loan notes, management incentive arrangements (such as...

UK private equity firms and funds: structures (limited partnerships), investor terms, regulation (FCA/AIFMD/RVECA), investment process, IRR/carry, and specialist vehicles (VCTs, ECFs)

Published by a LexisNexis Corporate expert

Practice notes

A Private equity fund is a collective investment arrangement. Created and overseen by private equity firms, these vehicles channel committed capital into privately owned companies—whose Securities are not traded on public markets—by purchasing existing issued securities or subscribing for newly issued securities...

Private equity firms

What is a private equity firm?

In essence, a private equity firm is a team of investment professionals that deploys and oversees money provided by external investors through Funds the firm establishes for private equity transactions...

Independent: Typically founded and owned by senior members of the firm, they manage multiple funds and raise capital from varied sources, including insurance companies, pension schemes and high net worth individuals...
Captive: Usually housed within large institutions such as banks, insurers and pension funds, they invest capital supplied by the parent institution and may, at times, be allowed to secure funding from third parties...

What is a private equity investment?

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Web page updated on 22/05/2026

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