PE - Private Equity
PE - Private Equity funds invest to acquire ownership of equity in companies that are at a high growth stage of their business. There are different types of private equity firms, and they participate either actively or passively in portfolio companies based on their strategies - may include Mezzanine capital, leveraged buyout, venture capital or growth buyout.
Passive participation is more commonly related to mature companies that have proven business models, but requires funds for expansion, entering new markets, restructuring their operations or financing an acquisition.
Active participation, on the other hand, has more to do with firms playing a direct role in restructuring a business, providing support or advice or re-arranging the senior management.
A Private Equity fund usually prefers to own the majority shareholding , which gives them complete control of the company’s affairs after a buyout.