{"concept_id":"ALTSS-PE-001","slug":"private-equity","canonical_name":"Private Equity","acronym":"PE","aliases":["PE"],"kind":"strategy","authority":"industry","facets":["ACL"],"domains":["PRIVATE-EQUITY"],"display_title":"Private Equity (PE)","search_aliases":["what is private equity","private equity meaning","how does private equity work","is venture capital private equity","private equity vs private capital","are private equity funds registered with the sec"],"disambiguation":"\"Private equity\" is used both narrowly (buyouts and growth equity) and broadly (all equity investment in unlisted companies, including venture capital); this page states which usage applies where.","one_sentence_definition":"Private equity (PE) is the asset class of equity and equity-like investments in unlisted companies, or companies being taken private, usually made through closed-end funds run by a general partner and realised through a sale or listing.","plain_english":"A private equity firm raises a fund from pension funds, endowments, insurers, family offices and other investors, uses it to buy stakes in private companies, works with those companies for several years and then sells the stakes. Investors get cash back mainly when holdings are sold or refinanced. Practitioners usually mean buyouts and growth equity; some industry bodies and researchers also include venture capital.","parent_concepts":["private-capital"],"child_concepts":["leveraged-buyout","growth-equity","buy-and-build"],"related_concepts":["venture-capital","portfolio-company","value-bridge","general-partner","limited-partner","carried-interest-carry","public-market-equivalent"],"comparison_concepts":[],"not_the_same_as":[{"slug":"private-capital","distinction":"Private capital is the wider category of private-market equity, credit and real-asset strategies; private equity is its equity-in-operating-companies part."},{"slug":"venture-capital","distinction":"In narrow usage venture capital is a separate asset class funding young companies through minority stakes; in broad usage it is a segment of private equity."},{"slug":"private-credit","distinction":"Private credit lends to companies, often to PE-owned borrowers; the lender's return is contractual interest and fees, not equity upside."},{"slug":"listed-private-equity","distinction":"Listed private equity vehicles give exchange-traded exposure to private holdings; the vehicle is public even though the underlying companies are private."}],"formula_ids":[],"worked_examples":[],"sections":[{"heading":"Broad and narrow usage","paragraphs":["The term is used at two widths. In the broad sense, private equity covers every strategy that buys equity in unlisted operating companies: venture capital, growth equity, buyouts and turnaround or special-situations equity. Invest Europe's industry statistics use the broad sense, counting buyout, growth, venture capital, generalist and mezzanine funds as private equity, and much academic work does the same: Harris, Jenkinson and Kaplan's study of private equity performance covers both buyout and venture funds. In the narrow sense, common among practitioners and in many LP allocation policies, private equity means buyouts and growth equity, and [venture capital](/glossary/venture-capital) is a separate allocation with its own benchmarks.","Neither usage is wrong, but a statistic, benchmark or allocation target means little until the width is known. On this site, \"private equity\" is used in the narrow sense unless a page says otherwise; venture capital has its own entry."]},{"heading":"Private equity, private capital and alternative investments","paragraphs":["The three terms nest. [Alternative investments](/glossary/alternative-assets) is the widest: everything outside long-only listed equities, bonds and cash, including hedge funds. [Private capital](/glossary/private-capital) is the part of alternatives invested in non-public assets through private vehicles: private equity, venture capital, [private credit](/glossary/private-credit), real estate, infrastructure and natural resources, plus the secondaries and co-investment markets built around them. Private equity is the part of private capital that owns equity in operating companies.","The boundaries matter for classification. Hedge funds are alternatives but not private capital: they mainly trade listed or liquid instruments in vehicles that offer periodic redemption. A loan to a buyout-owned company is private credit, not private equity, even though a private equity sponsor stands behind the borrower. Equity in buildings or infrastructure assets is normally classed as real estate or infrastructure, even when the fund is structured like a private equity fund."]},{"heading":"How a private equity fund works","paragraphs":["Most private equity is managed through closed-end limited partnerships. A general partner raises capital commitments from limited partners, calls that capital as it makes investments during an investment period of several years, holds each company for as long as its plan and market conditions require, and returns proceeds as investments are sold. The manager earns a management fee and a share of profits (carried interest) paid through a distribution waterfall. The model limited partnership agreement that the Institutional Limited Partners Association (ILPA) publishes for a traditional buyout fund comes in two versions, one with a whole-of-fund waterfall and one with a deal-by-deal waterfall.","Investor education material from the US Securities and Exchange Commission (SEC) describes private equity funds as pooled vehicles managed by an adviser, typically open only to accredited investors and qualified clients, whose investments are often illiquid for several years."]},{"heading":"Jurisdiction and status (US)","paragraphs":["Private equity funds are not registered investment companies. A US private fund stays outside registration under the Investment Company Act of 1940 by relying on an exclusion, usually section 3(c)(1), which caps the fund at 100 beneficial owners and bars a public offering, or section 3(c)(7), which requires every owner to be a qualified purchaser and also bars a public offering.","The adviser is regulated separately. Under 17 CFR 275.204(b)-1(a), an adviser registered or required to be registered with the SEC that advises private funds and managed at least $150 million of private fund assets at the end of its most recently completed fiscal year files [Form PF](/glossary/form-pf), a confidential report to regulators; filing it does not register the fund. A joint proposal of the SEC and the Commodity Futures Trading Commission (CFTC) published in April 2026 would raise that threshold to $1 billion; as of 2 October 2026 it had not been adopted. For Form PF purposes the SEC defines a private equity fund by exclusion: a private fund that is not a hedge fund, liquidity fund, real estate fund, securitised asset fund or venture capital fund and does not give investors redemption rights in the ordinary course. That definition follows the narrow usage described above. Since 11 December 2023, Section 6 of Form PF has required advisers that file the form to report certain events at the private equity funds they advise within 60 calendar days after the end of the quarter in which they occur: the closing of an adviser-led secondary transaction, removal of the general partner, and an investor election to end the investment period or terminate the fund. The April 2026 proposal would delete Section 6; as of 2 October 2026 the requirement remains in force. The SEC's 2023 Private Fund Adviser Rules, which would have required quarterly statements, annual audits and opinions on adviser-led secondaries, were vacated by the US Court of Appeals for the Fifth Circuit on 5 June 2024 and are not in force.","Form D, the notice an issuer files within 15 calendar days of its first sale under Regulation D, reports the amount offered and the amount sold as of the filing date. The date of first sale is when the first investor is irrevocably committed to invest, and the amounts include cash to be paid later under mandatory capital commitments, so a Form D figure describes one offering at one filing date, not a fund's final size."]},{"heading":"Strategies, transactions and structures","paragraphs":["Three kinds of label are often mixed up. Strategies describe what a manager does repeatedly: [leveraged buyouts](/glossary/leveraged-buyout) of established companies, [growth equity](/glossary/growth-equity) in expanding companies, buy-and-build consolidation, turnaround and special-situations equity, and, in the broad usage, venture capital. Transaction types describe a single deal: take-private, corporate carve-out, secondary buyout, management buyout, platform or add-on acquisition. Structures describe the vehicle: closed-end fund, co-investment vehicle, evergreen fund, continuation vehicle. A [continuation vehicle](/glossary/continuation-vehicle) is a liquidity structure created in a [GP-led secondary](/glossary/gp-led-secondary), not a private equity strategy, even though it holds private equity assets.","Ownership also varies. Buyout funds usually acquire control. Growth equity funds usually take minority stakes and rely on negotiated rights: board seats, consent rights over budgets, acquisitions and new financing, information rights and exit rights. Control is therefore not what defines private equity. The strategies share equity ownership of private operating companies, active involvement through a board seat or contractual rights, and a finite holding that ends in a sale, listing or recapitalisation."]},{"heading":"Where returns come from","paragraphs":["The gain on a private equity investment can be split into growth in earnings (revenue growth and margin change), change in the valuation multiple between entry and exit, and reduction of net debt from cash the company generates. Acquisition debt magnifies each of these effects on the equity. A [value bridge](/glossary/value-bridge) shows the split for one deal or a portfolio. How much of buyout returns comes from operating improvement rather than leverage and multiple change is an empirical question; the evidence is mixed and varies by period, sample and method, so a manager's attribution claims should be tested against its own deal-level data.","Private equity is not a yield instrument. Cash comes back mainly when holdings are sold or refinanced, through full or partial exits and dividend recapitalisations, so distributions are irregular and concentrated in the later years of a fund."]},{"heading":"What the performance evidence shows","paragraphs":["Academic results depend on data source, period and benchmark, and they do not all agree. Kaplan and Schoar (2005) found that average net-of-fee fund returns roughly matched the S&P 500, with large differences between funds and strong persistence across a manager's successive funds; their public market equivalent ratio became the standard academic benchmark. Harris, Jenkinson and Kaplan (2014), using Burgiss data on about 1,400 US buyout and venture funds, found that buyout funds beat the S&P 500 by 20% to 27% over fund life, more than 3% a year. Phalippou and Gottschalg (2009), on a different sample, found average net performance trailing the S&P 500 by about 3% a year (6% after risk adjustment) and attributed reported outperformance partly to inflated valuations of unrealised investments and to sample bias. On manager economics, Metrick and Yasuda (2010) estimated that about two-thirds of expected GP revenue comes from fixed components, mainly management fees, rather than from carried interest.","Three practical points follow for LPs: dispersion between managers is wide; interim returns rest on valuations; and a fair comparison with public markets needs a [public market equivalent](/glossary/public-market-equivalent) calculated on the fund's own cash flows."]},{"heading":"How LPs build and monitor exposure","paragraphs":["An allocation to private equity is built through commitments, not purchases. Capital is called over several years and returned over several more, so investors manage commitment pacing, the J-curve and unfunded commitments rather than a fixed weight. Interim values are fair-value estimates: the [IPEV Valuation Guidelines](/glossary/ipev-valuation-guidelines), whose 2025 edition is in effect for quarterly reporting periods beginning on or after 1 April 2026, define fair value consistently with International Financial Reporting Standard (IFRS) 13 and US Accounting Standards Codification (ASC) Topic 820. Because outcomes differ widely between managers, manager selection carries most of the weight. ILPA Principles 3.0 set out ILPA's recommendations to GPs and LPs on alignment of interest, governance and transparency, and ILPA's reporting and performance templates standardise how fees, expenses, carried interest and returns are reported."]}],"classification_rules":["Narrow usage: classify as private equity an equity or equity-like position (common or preferred shares, convertibles, sponsor shareholder loans held as part of the equity) in an unlisted operating company, or one being taken private, held for an exit by sale, listing or recapitalisation, with control or negotiated governance rights.","Include venture capital only when the broad convention is in use, and state which convention a dataset, benchmark or allocation follows.","Classify loans, notes and unitranche facilities to sponsor-backed companies as private credit.","Classify equity in real estate and infrastructure assets under real assets, even when the vehicle is structured like a private equity fund.","Classify a vehicle that buys existing fund interests or continuation-vehicle positions as secondaries, and one that invests in other private equity funds as a fund of funds; both give private equity exposure but are separate strategies."],"calculation_rules":[],"common_mistakes":["Listing continuation vehicles as a private equity strategy. They are a secondaries and liquidity structure.","Calling private funds \"registered funds\". US private equity funds rely on Investment Company Act exclusions; Form PF is a confidential adviser report, not a fund registration.","Reading the amount sold on a single Form D as a fund's final size. It covers one offering as of the filing date, including commitments not yet called.","Saying control defines private equity. Growth equity is usually a minority strategy.","Describing private equity as a source of yield or running income.","Using \"private equity\" and \"private capital\" interchangeably.","Describing the SEC's 2023 Private Fund Adviser Rules (quarterly statements, mandatory audits) as in force. They were vacated in June 2024.","Mixing statistics that use the broad definition (including venture) with statistics that use the narrow one."],"edge_cases":["A private investment in public equity (PIPE) made by a private equity fund buys securities of a listed company: the security is public equity, the strategy is private equity.","Evergreen and semi-liquid funds sold to private wealth investors hold private equity assets but offer periodic liquidity subject to gates and limits.","Special-situations funds may buy a company's debt to take ownership in a restructuring (loan-to-own): the instrument is credit, the intended outcome is equity.","Growth buyouts take majority control of growing companies with modest leverage and sit between growth equity and buyout."],"external_standard_mappings":[],"source_ids":["SRC-ACAD-HARRIS-JENKINSON-KAPLAN-2014","SRC-ACAD-KAPLAN-SCHOAR-2005","SRC-ACAD-METRICK-YASUDA-2010","SRC-ACAD-PHALIPPOU-GOTTSCHALG-2009","SRC-ILPA-MODEL-LPA","SRC-ILPA-PERFORMANCE-TEMPLATE-2025","SRC-ILPA-PRINCIPLES-3","SRC-ILPA-REPORTING-TEMPLATE-2025","SRC-INVESTEUROPE-RESEARCH-METHODOLOGY-2025","SRC-IPEV-2025","SRC-US-COURT-CA5-23-60471","SRC-US-ECFR-239-500","SRC-US-ECFR-275-204B-1","SRC-US-FR-2023-09775","SRC-US-FR-2026-07993","SRC-US-FR-2026-18104","SRC-US-INVESTORGOV-PRIVATE-EQUITY","SRC-US-SEC-FORM-D-FORM","SRC-US-SEC-FORM-PF","SRC-US-SEC-PFAR-VACATUR-NOTICE","SRC-US-USC-15-80A-3","SRC-US-USC-15-80B-4"],"citations":[{"source_id":"SRC-US-INVESTORGOV-PRIVATE-EQUITY","pinpoint":"Private Equity Funds","supports":"PE funds as pooled vehicles managed by an adviser, typically limited to accredited investors and qualified clients, illiquid for several years","source":{"source_id":"SRC-US-INVESTORGOV-PRIVATE-EQUITY","title":"Private Equity Funds","publisher":"U.S. Securities and Exchange Commission (Investor.gov)","document_type":"guidance","url":"https://www.investor.gov/introduction-investing/investing-basics/investment-products/private-investment-funds/private-equity","publication_date":"Accessed 2026-10-01","jurisdiction":"US","status":"current","last_verified":"2026-10-01"}},{"source_id":"SRC-US-USC-15-80A-3","pinpoint":"Sec. 3(c)(1); sec. 3(c)(7)(A)","supports":"Private funds rely on Investment Company Act exclusions rather than registration","source":{"source_id":"SRC-US-USC-15-80A-3","title":"15 U.S.C. 80a-3 - Definition of investment company (Investment Company Act sec. 3, incl. 3(c)(1) and 3(c)(7))","publisher":"U.S. Congress (United States Code; LII mirror)","document_type":"statute","url":"https://www.law.cornell.edu/uscode/text/15/80a-3","publication_date":"Current US Code text as published by LII (accessed 2026-10-01)","jurisdiction":"US","status":"in force","last_verified":"2026-10-01"}},{"source_id":"SRC-US-ECFR-275-204B-1","pinpoint":"17 CFR 275.204(b)-1(a)","supports":"Form PF filed by advisers registered or required to be registered with the SEC that advise private funds and managed at least $150 million of private fund assets at the end of the most recently completed fiscal year","source":{"source_id":"SRC-US-ECFR-275-204B-1","title":"17 CFR 275.204(b)-1 - Reporting by investment advisers to private funds (Form PF filing obligation)","publisher":"U.S. Securities and Exchange Commission (CFR text via eCFR; LII mirror)","document_type":"regulation","url":"https://www.law.cornell.edu/cfr/text/17/275.204(b)-1","publication_date":"eCFR current as of 2026-09-29; last amended 2025-03-12","jurisdiction":"US","status":"in force (2024 Form PF amendments not yet in compliance)","last_verified":"2026-10-01"}},{"source_id":"SRC-US-USC-15-80B-4","pinpoint":"Sec. 204(b)(8)","supports":"The SEC may not be compelled to disclose Form PF reports (limited exceptions): Form PF is a confidential report","source":{"source_id":"SRC-US-USC-15-80B-4","title":"15 U.S.C. 80b-4 - Reports by investment advisers (Advisers Act s.204), incl. s.204(b) records and reports of private funds","publisher":"U.S. Congress (US Code via LII)","document_type":"statute","url":"https://www.law.cornell.edu/uscode/text/15/80b-4","publication_date":"Current US Code text as published by LII (accessed 2026-10-01)","jurisdiction":"US","status":"in force","last_verified":"2026-10-01"}},{"source_id":"SRC-US-FR-2023-09775","pinpoint":"88 FR 38146; DATES (Form PF sections 5 and 6 effective and compliance date 2023-12-11)","supports":"Quarterly event reporting in Form PF Section 6 by advisers to private equity funds since 11 December 2023","source":{"source_id":"SRC-US-FR-2023-09775","title":"Form PF; Event Reporting for Large Hedge Fund Advisers and Private Equity Fund Advisers; Requirements for Large Private Equity Fund Adviser Reporting (final rule), Release IA-6297, 88 FR 38146","publisher":"U.S. Securities and Exchange Commission (Federal Register via govinfo)","document_type":"release","url":"https://www.govinfo.gov/content/pkg/FR-2023-06-12/pdf/2023-09775.pdf","publication_date":"Adopted 2023-05-03; published 2023-06-12; sections 5 and 6 effective 2023-12-11; remainder effective 2024-06-11","jurisdiction":"US","status":"in force","last_verified":"2026-10-01"}},{"source_id":"SRC-US-SEC-PFAR-VACATUR-NOTICE","pinpoint":"Announcement of 2024-10-31","supports":"Scope of the vacated Private Fund Adviser Rules","source":{"source_id":"SRC-US-SEC-PFAR-VACATUR-NOTICE","title":"Announcement Regarding the Private Fund Advisers Rules","publisher":"U.S. Securities and Exchange Commission","document_type":"guidance","url":"https://www.sec.gov/announcement-regarding-private-fund-advisers-rules","publication_date":"2024-10-31","jurisdiction":"US","status":"current","last_verified":"2026-10-01"}},{"source_id":"SRC-US-COURT-CA5-23-60471","pinpoint":"Decided 2024-06-05","supports":"Fifth Circuit vacatur of the Private Fund Adviser Rules","source":{"source_id":"SRC-US-COURT-CA5-23-60471","title":"National Association of Private Fund Managers v. SEC, No. 23-60471 (5th Cir. June 5, 2024)","publisher":"U.S. Court of Appeals for the Fifth Circuit (via govinfo, USCOURTS collection)","document_type":"court","url":"https://www.govinfo.gov/app/details/USCOURTS-ca5-23-60471","publication_date":"Decided 2024-06-05","jurisdiction":"US","status":"final","last_verified":"2026-10-01"}},{"source_id":"SRC-US-ECFR-239-500","pinpoint":"17 CFR 239.500(a)(1)","supports":"Form D due within 15 calendar days after the first sale","source":{"source_id":"SRC-US-ECFR-239-500","title":"17 CFR 239.500 - Form D, notice of sales of securities under Regulation D and section 4(a)(5) of the Securities Act of 1933","publisher":"U.S. Securities and Exchange Commission (CFR text via eCFR; LII mirror)","document_type":"regulation","url":"https://www.law.cornell.edu/cfr/text/17/239.500","publication_date":"eCFR current as of 2026-09-29; last amended 2016 (81 FR 83553, Nov. 21, 2016; eCFR version dated 2017-05-23)","jurisdiction":"US","status":"in force","last_verified":"2026-10-01"}},{"source_id":"SRC-US-SEC-FORM-D-FORM","pinpoint":"General Instructions, When to file (date of first sale); Item 13 instructions (Offering and Sales Amounts)","supports":"Form D reports the amounts offered and sold as of the filing date, including cash to be paid in the future under mandatory capital commitments; the date of first sale is when the first investor is irrevocably contractually committed to invest","source":{"source_id":"SRC-US-SEC-FORM-D-FORM","title":"Form D - Notice of Exempt Offering of Securities (form and instructions, paper version)","publisher":"U.S. Securities and Exchange Commission","document_type":"form","url":"https://www.sec.gov/files/formd.pdf","publication_date":"SEC1972 (5/17); OMB No. 3235-0076, expires 2027-07-31","jurisdiction":"US","status":"in force","last_verified":"2026-10-01"}},{"source_id":"SRC-ILPA-MODEL-LPA","pinpoint":"Whole of Fund and Deal-by-Deal versions","supports":"Model LPA for a traditional buyout fund with whole-of-fund or deal-by-deal waterfall","source":{"source_id":"SRC-ILPA-MODEL-LPA","title":"ILPA Model Limited Partnership Agreement (Whole of Fund and Deal-by-Deal versions)","authors":"Institutional Limited Partners Association","publisher":"ILPA","document_type":"template","url":"https://ilpa.org/industry-guidance/templates-standards-model-documents/model-limited-partnership-agreement/","year":2020,"publication_date":"Whole of Fund first released October 2019, updated July 2020; Deal-by-Deal version and term sheet released 22 July 2020","jurisdiction":"intl","status":"Current","last_verified":"2026-10-01"}},{"source_id":"SRC-ILPA-PRINCIPLES-3","pinpoint":"Guiding principles; p. 7 (Underlying Themes)","supports":"ILPA recommendations on alignment of interest, governance and transparency, addressed to both LP and GP behaviour","source":{"source_id":"SRC-ILPA-PRINCIPLES-3","title":"ILPA Principles 3.0: Fostering Transparency, Governance and Alignment of Interests for General and Limited Partners","authors":"Institutional Limited Partners Association","publisher":"ILPA","document_type":"guidance","url":"https://ilpa.org/wp-content/uploads/2019/06/ILPA-Principles-3.0_2019.pdf","year":2019,"publication_date":"Third edition, released 27 June 2019","jurisdiction":"intl","status":"Current edition (no 4.0 found as of 2026-10-01)","last_verified":"2026-10-01"}},{"source_id":"SRC-ILPA-REPORTING-TEMPLATE-2025","pinpoint":"v2.0","supports":"Standardised reporting of fees, expenses and carried interest","source":{"source_id":"SRC-ILPA-REPORTING-TEMPLATE-2025","title":"ILPA Reporting Template (v. 2.0)","authors":"Institutional Limited Partners Association","publisher":"ILPA","document_type":"template","url":"https://ilpa.org/resources-tools/resource-library/ilpa-reporting-template-v-2-0/","year":2025,"publication_date":"v2.0 released 21 January 2025 under the Quarterly Reporting Standards Initiative (QRSI)","jurisdiction":"intl","status":"Current; ILPA recommends implementation from Q1 2026","last_verified":"2026-10-01"}},{"source_id":"SRC-ILPA-PERFORMANCE-TEMPLATE-2025","pinpoint":"v1.1","supports":"Standardised reporting of gross and net IRR and TVPI/MOIC","source":{"source_id":"SRC-ILPA-PERFORMANCE-TEMPLATE-2025","title":"ILPA Performance Template (Granular Methodology and Gross Up Methodology), v1.1","authors":"Institutional Limited Partners Association","publisher":"ILPA","document_type":"template","url":"https://ilpa.org/industry-guidance/templates-standards-model-documents/ilpa-templates-hub/ilpa-performance-template/","year":2025,"publication_date":"Released January 2025 (QRSI); v1.1 April 2025","jurisdiction":"intl","status":"Current; for funds commencing operations on or after 1 January 2026","last_verified":"2026-10-01"}},{"source_id":"SRC-IPEV-2025","pinpoint":"Preface (in effect for quarterly reporting periods beginning on or after 1 April 2026); Section I 1.1; Appendix 3 (compliance with IFRS 13 and ASC 820)","supports":"Fair value definition consistent with IFRS 13 / ASC 820; edition in effect for quarterly reporting periods beginning on or after 1 April 2026","source":{"source_id":"SRC-IPEV-2025","title":"International Private Equity and Venture Capital Valuation Guidelines (2025 edition)","authors":"IPEV Board","publisher":"IPEV","document_type":"standard","url":"https://www.privateequityvaluation.com/Portals/0/Documents/Guidelines/2025%20IPEV%20Valuation%20Guidelines.pdf","year":2025,"publication_date":"Published 11 December 2025; in effect for quarterly reporting periods beginning on or after 1 April 2026; early adoption encouraged","jurisdiction":"intl","status":"Current; supersedes the December 2022 edition","last_verified":"2026-10-01"}},{"source_id":"SRC-INVESTEUROPE-RESEARCH-METHODOLOGY-2025","pinpoint":"p. 3 (Dataset, footnote)","supports":"Invest Europe statistics define private equity to encompass buyout, generalist, growth, mezzanine and venture capital funds","source":{"source_id":"SRC-INVESTEUROPE-RESEARCH-METHODOLOGY-2025","title":"Invest Europe Research: Publications Methodology & Definitions (September 2025)","publisher":"Invest Europe","document_type":"methodology","url":"https://www.investeurope.eu/media/ewvl2sb2/invest-europe-research-publications-methodology-definitions-september-2025.pdf","publication_date":"September 2025 (PDF dated 2025-09-12; 36 pages)","jurisdiction":"EU","status":"current","last_verified":"2026-10-01"}},{"source_id":"SRC-ACAD-KAPLAN-SCHOAR-2005","pinpoint":"Abstract; pp. 1791–1823","supports":"Average net returns close to the S&P 500, heterogeneity, persistence; introduction of the PME ratio","source":{"source_id":"SRC-ACAD-KAPLAN-SCHOAR-2005","title":"Private Equity Performance: Returns, Persistence, and Capital Flows","authors":"Steven N. Kaplan; Antoinette Schoar","publisher":"The Journal of Finance","document_type":"paper","url":"https://doi.org/10.1111/j.1540-6261.2005.00780.x","doi":"10.1111/j.1540-6261.2005.00780.x","year":2005,"publication_date":"Vol. 60(4), pp. 1791-1823, August 2005","jurisdiction":"intl","status":"Published (journal paywalled; NBER w9807 working paper)","last_verified":"2026-10-01"}},{"source_id":"SRC-ACAD-HARRIS-JENKINSON-KAPLAN-2014","pinpoint":"Abstract; pp. 1851–1882","supports":"Buyout outperformance of the S&P 500 in Burgiss data; broad usage covering buyout and VC funds","source":{"source_id":"SRC-ACAD-HARRIS-JENKINSON-KAPLAN-2014","title":"Private Equity Performance: What Do We Know?","authors":"Robert S. Harris; Tim Jenkinson; Steven N. Kaplan","publisher":"The Journal of Finance","document_type":"paper","url":"https://doi.org/10.1111/jofi.12154","doi":"10.1111/jofi.12154","year":2014,"publication_date":"Vol. 69(5), pp. 1851-1882","jurisdiction":"intl","status":"Published (paywalled)","last_verified":"2026-10-01"}},{"source_id":"SRC-ACAD-PHALIPPOU-GOTTSCHALG-2009","pinpoint":"Abstract; pp. 1747–1776","supports":"Average net underperformance of the S&P 500 in their sample; valuation and sample-bias explanation","source":{"source_id":"SRC-ACAD-PHALIPPOU-GOTTSCHALG-2009","title":"The Performance of Private Equity Funds","authors":"Ludovic Phalippou; Oliver Gottschalg","publisher":"The Review of Financial Studies","document_type":"paper","url":"https://doi.org/10.1093/rfs/hhn014","doi":"10.1093/rfs/hhn014","year":2009,"publication_date":"Vol. 22(4), pp. 1747-1776","jurisdiction":"intl","status":"Published (paywalled)","last_verified":"2026-10-01"}},{"source_id":"SRC-ACAD-METRICK-YASUDA-2010","pinpoint":"Abstract; pp. 2303–2341","supports":"About two-thirds of expected GP revenue from fixed components","source":{"source_id":"SRC-ACAD-METRICK-YASUDA-2010","title":"The Economics of Private Equity Funds","authors":"Andrew Metrick; Ayako Yasuda","publisher":"The Review of Financial Studies","document_type":"paper","url":"https://doi.org/10.1093/rfs/hhq020","doi":"10.1093/rfs/hhq020","year":2010,"publication_date":"Vol. 23(6), pp. 2303-2341","jurisdiction":"intl","status":"Published (paywalled)","last_verified":"2026-10-01"}},{"source_id":"SRC-US-SEC-FORM-PF","pinpoint":"Glossary of terms, \"private equity fund\"; General Instruction 1; General Instruction 3 (Section 6); Section 6 preamble and Items B-C","supports":"Form PF definition of a private equity fund by exclusion; Section 6 events (adviser-led secondary closing; GP removal; investment-period or fund termination) reported within 60 calendar days after quarter end","source":{"source_id":"SRC-US-SEC-FORM-PF","title":"Form PF (reference copy): General Instructions and Glossary","publisher":"U.S. Securities and Exchange Commission","document_type":"form","url":"https://www.sec.gov/files/formpf.pdf","publication_date":"Reference copy posted at sec.gov/files/formpf.pdf, OMB No. 3235-0679; includes Sections 5 and 6 added by the 2023 amendments","jurisdiction":"US","status":"current","last_verified":"2026-10-01"}},{"source_id":"SRC-US-FR-2026-07993","pinpoint":"91 FR 22232 (published 2026-04-24); Summary; Table 1a, 91 FR 22234 (filing threshold from $150 million to $1 billion); Table 1b, 91 FR 22234-22235, and \"Eliminate Form PF Private Equity Quarterly Reporting in Section 6\", 91 FR 22257 (Section 6 eliminated)","supports":"Pending April 2026 joint SEC-CFTC proposal to raise the Form PF filing threshold to $1 billion and to delete Section 6","source":{"source_id":"SRC-US-FR-2026-07993","title":"Form PF; Reporting Requirements for All Filers (joint proposed rules), 91 FR 22232","publisher":"U.S. Securities and Exchange Commission and Commodity Futures Trading Commission (Federal Register via govinfo)","document_type":"release","url":"https://www.govinfo.gov/content/pkg/FR-2026-04-24/pdf/2026-07993.pdf","publication_date":"Proposed 2026-04-20; published 2026-04-24; comments due 2026-06-23","jurisdiction":"US","status":"proposed","last_verified":"2026-10-01"}},{"source_id":"SRC-US-FR-2026-18104","pinpoint":"91 FR 56593 (published 2026-09-03)","supports":"Compliance date of the 2024 Form PF amendments extended to 2027-07-01 to allow consideration of comments on the April 2026 proposal, which remains a proposal","source":{"source_id":"SRC-US-FR-2026-18104","title":"Form PF; Reporting Requirements for All Filers and Large Hedge Fund Advisers; Further Extension of Compliance Date (joint final rule), 91 FR 56593","publisher":"U.S. Securities and Exchange Commission and Commodity Futures Trading Commission (Federal Register via govinfo)","document_type":"release","url":"https://www.govinfo.gov/content/pkg/FR-2026-09-03/pdf/2026-18104.pdf","publication_date":"Published and effective 2026-09-03","jurisdiction":"US","status":"in force","last_verified":"2026-10-01"}}],"faq":[{"q":"Is venture capital part of private equity?","a":"It depends on the convention. Invest Europe's industry statistics and much academic research treat venture capital as a segment of private equity; many practitioners and LP allocation policies treat it as a separate asset class. Check which usage a statistic or benchmark follows."},{"q":"Are private equity funds registered with the SEC?","a":"No. US private equity funds rely on the section 3(c)(1) or 3(c)(7) exclusions from the Investment Company Act. Many of their advisers are registered with the SEC, and a registered adviser with at least $150 million of private fund assets at its last fiscal year end files the confidential Form PF (17 CFR 275.204(b)-1(a)); a proposal of April 2026, not adopted as of 2 October 2026, would raise that threshold to $1 billion."},{"q":"Does private equity pay regular income?","a":"Not in the way bonds or leased real estate do. Cash is returned mainly through exits and recapitalisations, so distributions are irregular. Income-oriented private-market exposure usually comes from private credit or real assets."}],"seo":{},"first_published":"2025-12-23","last_reviewed":"2026-10-02","last_modified":"2026-10-02","content_version":"2.0.0","url":"https://altss.com/glossary/private-equity","json_url":"https://altss.com/reference/concepts/private-equity.json","title":"Private Equity (PE)","formulas":[],"sources":[{"source_id":"SRC-ACAD-HARRIS-JENKINSON-KAPLAN-2014","title":"Private Equity Performance: What Do We Know?","authors":"Robert S. Harris; Tim Jenkinson; Steven N. Kaplan","publisher":"The Journal of Finance","document_type":"paper","url":"https://doi.org/10.1111/jofi.12154","doi":"10.1111/jofi.12154","year":2014,"publication_date":"Vol. 69(5), pp. 1851-1882","jurisdiction":"intl","status":"Published (paywalled)","last_verified":"2026-10-01"},{"source_id":"SRC-ACAD-KAPLAN-SCHOAR-2005","title":"Private Equity Performance: Returns, Persistence, and Capital Flows","authors":"Steven N. 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