Much like hedge funds, private equity groups are lightly-regulated. They pursue opportunities outside of the public markets (hence the "private" in their name). Within this category, buyout groups purchase all of a company's stock on the public markets and take that company private, looking to re-sell the shares at a later date for a profit, typically after making operational improvements at the company. Venture capital groups invest in small, start-up companies (typically in technology); this is a high risk-reward strategy that aims to make a large profit on a handful of successes that outweighs the larger number of failures.
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