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Definition: Private Equity Fund
Private equity is the equity shares that are not traded publicly. In simple words, it is the ownership in a corporation that is not publicly traded. Therefore, it involves investing in privately held or non-publicly traded companies.
Private equity funds are those normally maintained by investment professionals at private equity firms and is used for investment in various equity investments (most often private equity). This is done in order to gain control over companies after which they are taken off the market (in case of public companies), restructure it throughout the coming years and then list it back on the stock market.
Private equity funds are organized as limited partnerships where the general partners (private equity firms) manage the fund and the limited partners (institutional investors such as corporate and public pension funds, endowments, as well as insurance companies and wealthy individuals) provide the capital.
Example:Kohlberg Kravis Roberts & Co. (KKR) – KKR 2006 Fund, L.P. ($17.6 billion of commitments)