Private Equity

limited partnership controlled by a private equity firm that acts as the general partner and that gets specific dollar commitments from qualified institutional investors and individual accredited investors. These passive limited partners fund pro rata portions of their commitments when the general partner has identified an appropriate opportunity, which may be venture capital to finance new products and technologies, expanding working capital, making acquisitions, financing leveraged buyouts (LBOs), and other investments in which the equity is not publicly traded. Afund will typically make between 15 and 25 separate investments over a ten-year life, with no single investment exceeding 10% of the total commitment. Well-known examples of private equity funds are Blackstone Group and Carlyle Group.