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Private equity refers to investment funds that provide capital to private companies or engage in buyouts of public companies, leading to their delisting from public stock exchanges. These investments are typically made by institutional investors and high-net-worth individuals seeking higher returns than those offered by traditional public market investments. Private equity firms often take an active role in managing their portfolio companies, implementing strategic changes, and enhancing operations to increase value over time. After several years, these firms typically exit their investments through sales or public offerings, ideally reaping substantial profits. Overall, private equity plays a crucial role in the growth and restructuring of businesses.