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 and venture capital glossary for lawyers: fund structures, carried interest and tax

Published by a LexisNexis Tax expert

Practice notes

This glossary outlines the meanings of commonly used terms in the Private equity and Venture capital arena. It may assist when considering the tax matters that arise in this field. For the tax issues in a private equity context, see:

Tax and private equity funds—overview
Tax and management Buyouts—overview
Tax and secondary buyouts—overview

acquisition

The act of obtaining an ownership stake in a target company, typically culminating in 50% or more of the target being taken over.

acquisition finance

External funding raised to support an acquisition. This may consist of bank borrowing, loans and/or Equity (for example, a share issue).

buy-in management buyout (BIMBO)

A buyout combining both incoming and existing managers. Part of the current management acquires sufficient share capital to buy the company from within while, at the same time, an external management team buys in. Both groups may need financial backing to complete the transaction.

buyout

The purchase of a business, often supported by private equity investment, with emphasis on a future exit (generally within a three...

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Web page updated on 22/05/2026

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