April 23, 2026
| by Whitney LeggePrivate equity has long been beyond the reach of retail investors, promising institutions and high-net-worth individuals access to investments with potentially large-scale returns.
Unlike public equity — shares in companies traded openly on stock exchanges — private equity involves investments in privately owned companies, away from the scrutiny and liquidity of public markets.
“Private equity’s edge comes from its independence: the ability to deploy capital flexibly, take long-term bets, and avoid the quarterly earnings grind,” explains Amit Seru, a professor of finance at Stanford Graduate School of Business. In exchange for locking up their money for years at a time, investors have historically been rewarded with returns that public markets can’t match.
Investment firms are increasingly eager to give retail investors a chance to participate in private equity. The catch, as Seru has noted, is that investors who expect transparency and quick sales might be in for a shock when they dabble in private markets.
Watch this short explainer video to learn more.
Full Transcript
Note: Transcripts are generated by machine and lightly edited by humans. They may contain errors.
Most people invest by buying shares of publicly traded companies. They might own stock in an individual company or invest in a collection of companies through a mutual fund or exchange-traded fund. As shareholders, investors are entitled to information about a company’s financial performance, and they can quickly and easily turn their investments into cash by selling their shares. This is called public equity.
Private equity is investment in privately owned companies that are not traded on public stock exchanges. Private equity includes a range of investments, from venture capital to leveraged buyouts. It’s typically the realm of high-net-worth individuals and institutions like pension funds that are able to meet steep investment minimums and willing to accept long-term risks for potentially large-scale returns.
Investment firms are increasingly eager to give retail investors a chance to participate in private equity. The promise of higher yields can sound pretty enticing. The catch? An influx of less savvy, risk-averse investors could draw the attention of regulators and lawmakers, putting private equity squarely in the public eye.
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