A Private Equity Primer

Abstract

Historically, private equity investments have often been grouped in a larger category of investments called alternative investments. Alternative investments were defined to be any investments other than publicly traded stocks and bonds. In addition to private equity investments, alternatives often included real estate, hedge funds, portfolio insurance schemes, trading and arbitrage programs, long/short portfolios, and various derivative-based programs. This primer is limited to private equity investments, which Meketa Investment Group defines to be investments in companies that are privately owned. Further, this primer only describes the characteristics of the asset class itself. It does not suggest a target allocation to the asset class, nor does it specify how to implement an investment program in private equities. These issues are client specific and must be addressed by the decision-makers in each group. WHAT IS PRIVATE EQUITY?