PRIVATE EQUITY EXPLAINED With the global private equity market now worth over $4tn, according to Preqin’s 2020 Global Private Equity and Venture Capital Report, analysts have described the rise of PE as ‘one of the most profound shifts in the capital markets since the 19th century’ when public equity markets first became widely accessible to investors. As arguably the most developed PE market in Europe, the UK has been at the centre of this trend, with leading PE funds reporting increased flows over the past five years, even amid the height of Brexit uncertainty. WHAT IS PRIVATE EQUITY? A Private Equity firm is an investment management company that typically raises funds from institutional sources such as pension funds, insurance companies, family offices and high- net-worth individuals, and then look to invest these funds in return for an equity stake in companies with growth potential. The capital raised can be used to drive growth in the business through investment into new technologies, enhanced cash flow, the introduction of additional technical expertise and a more engaged and motivated employee base through shared incentives.