Equity provided by private and/or institutional investors and used by holding companies (private equity companies) to acquire company shares for a limited period of time, with the aim of earning financial return on investment. In a narrower sense, the term private equity investments encompasses the financing of established companies in advanced stages of the life cycle. In a broader sense, private equity describes the financing of private companies with equity and therefore also includes venture capital investments with a higher risk/return profile.
Source: Gabler Wirtschaftslexikon