What is a private equity buyout?

In private equity, funds and investors seek out underperforming or undervalued companies that they can take private and turn around, before going public years later. Buyout firms are involved in management buyouts (MBOs), in which the management of the company being purchased takes a stake.

What is a buyout fund?

A buyout fund is a type of private equity fund that typically seeks to gain controlling or majority (>50%) ownership of a company, with the goal of creating value by improving the operations of the company. 1 The private equity firm overseeing the fund later seeks to sell or take these companies public at higher valuations.

How much money did private equity buyouts make in 2022?

In 2022, private equity buyouts totaled $654 billion, the second-best performance in history. Private equity investing tends to grow more lucrative and popular during periods when stock markets are riding high and interest rates are low and less so when those cyclical factors turn less favorable.