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The basics

Private equity

Firms that buy or invest in established companies, usually aiming to make them more profitable and sell them on within a few years. Often shortened to PE.

A plain-English explanation, not financial or tax advice. Rules and rates change, so check your own situation. For free, impartial guidance, try MoneyHelper. Disclaimer.

You'll hear it as

We've been bought by a private equity firm.

Why it matters to you.

When private equity buys a company, cost-cutting and a push for profit usually follow quickly.

Also called PE.

Related terms.

Videos.

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