Private Equity vs. Public Equity: What's the Difference? by Greg McFarlane

Source link: TL;DR: Public equity is widely known and highly liquid making it a viable option for most types of investors. Private equity investing is generally geared more for sophisticated investors and often requires that investors are accredited with certain minimum requirements for net worth. How helpful? Scale of 1 to 5: 5 Topic Tags: IPO, Private Equity, Public Equity, Investing, Capital, Markets, Stocks, Investment Banking Relevant questions addressed: ● What are the main differences between public and private equity? ● What type of people invest via public equity vs type of people who invest in private equity? ● Can companies switch between being public and private?

  • Summary bullet points: ● Both public and private equity have advantages and disadvantages for companies and investors. ● One of the biggest differences in private versus public equity is that private equity investors are generally paid through distributions rather than stock accumulation. ● An advantage for public equity is its liquidity as most publicly traded stocks are available and easily traded daily through public market exchanges.
  • Follow up links: ● Private Equity Funds: basics/investment-products/private-investment-funds/private-equity ● Investing in an IPO:

● More on Investment Banking: are-major-differences-between-investment-banking-and-private-equity.asp