Being an aspiring commercial lawyer often means being confronted
by complex, often abstract, concepts. This can result in a wall of
jargon, which students and trainees often find difficult to
understand. We've therefore introduced LegalLingo to break down these concepts into
bite-size explanations to make the industry more accessible for
aspiring trainees.
To kick off, if you've ever wondered what 'private
equity' actually is but been too ashamed to ask, here is our
LegalLingo explanation:
A "private equity fund" is an investment fund, often
in the form of a limited partnership, that uses money invested by
private investors to acquire shares in private companies, either
directly or by delisting public securities (hence 'Private
Equity' or 'PE'). There are also funds that lend debt,
but these are usually referred to as 'credit funds'.
Investors in the PE fund, for example sovereign wealth funds or
pension funds, become limited partners (or 'LPs') in the PE
fund.
