Private Equity and Principal Investors

Private equity (PE) firms, managing over $6 trillion in U.S. assets, buy private companies with growth potential and later sell them for profit. They take these companies private, allowing for independent decision-making without shareholder influence. PE firms typically implement changes to enhance the company's value, such as cost-cutting. The private equity industry, newer than other financial sectors, originated in 1946 and gained significant momentum in the 1980s.