Private equity is a form of investment that takes place outside the public stock market through which investors gain an ownership stake in private companies. Known as an alternative asset, private equity lets accredited investors and institutional investment firms diversify their portfolios and take on more risk in exchange for the potential to earn higher…

Chris Davis is a writer at NerdWallet. Email: cdavis@nerdwallet.com.

The article Private Equity: What It Is and How to Start Investing originally appeared on NerdWallet.

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