Private equity investors are long-term investors in medium-sized and large unlisted companies. Established, generally thriving, companies seek private equity whenever they want to grow quickly or when a company's management wants to take over the company or a business unit, where debt financing alone would be insufficient. Promising start-ups and small businesses often need equity as well. This is called venture capital.
There are several other situations in which private equity may be useful. For example, when financing the growth of a company through internationalisation or acquisitions. A private equity investor may also be the solution when carving out a company or business unit in a so-called buyout. This may be the case when a business unit no longer fits in with the company's corporate strategy. In this event, the current management can take over part of the company. A private equity investor may also be a solution for a buy-in, when continuing a company with new shareholders; for bridge financing, prior to an IPO, for example; or when de-listing a company (public-to-private). Finally, a private equity investor may be an interesting partner for restructuring (turnaround), i.e. changing a company's focus or financing structure.