Private Equity

Private equity is basically when a firm or group of investors buy a company to improve it and then sell it for a profit. Instead of buying stocks on the public market, private equity firms buy whole companies or large stakes in them, usually ones that aren’t doing great or have potential to grow. For example, a private equity firm might buy a struggling retail chain, make changes to management, cut costs, and improve the business. After a few years, they’ll sell it—hopefully for much more than they paid. The goal is to boost the company’s value and make a good return on investment. It’s kind of like flipping a house, but on a much larger scale and with companies instead of real estate. I've also seen lots of cases of private equity firms buying up fast food franchise locations and building them up through marketing and overall quality improvement in order to achieve a high return on investment.