Private equity IRR is the internal rate of return on a PE investment or fund

In 2024, US private equity posted an 8.1% return

Tracked by Cambridge Associates, 2024 performance saw limited partner distributions overtake contributions for the first time in years. Cambridge Associates, a leader in the space, typically uses a 2.0x+ MOIC (Multiple on Invested Capital) as a benchmark for top-quartile PE fund success.

Some institutional investors are growing wary of private equity, as certain investments underperform traditional market indices

Private equity often attracts investors who can afford to tie up capital for long periods of time in exchange for higher returns than traditional investments. For many years, private equity at least tracked with the S&P 500 in terms of returns to investors, but in 2024 and 2025, it underperformed and posted declining returns.

Private equity is viewed as an alternative investment

These different types of private equity include venture capital, growth equity, and buyouts.

Investing in private equity is typically reserved for 'accredited investors'

Limiting PE to accredited investors helps protect less experienced investors from large and risky investments. Accredited investors must meet requirements set by the Securities and Exchange Commission—they're typically required to have a net worth exceeding $1M, for instance. (Some users may experience a paywall.)

The majority of capital in private equity funds is provided by institutional investors

The individuals who invest this initial capital are called the firm's limited partners. Private equity firm LPs include sovereign wealth funds, university endowments, high-net-worth individuals, and more.

Private equity companies are selling off more acquisitions—but at much lower prices

In 2025, private equity exits were up by 5.4%, but the total value of those deals was down by 21.2% year-over-year. An exit occurs when a private equity firm either sells an acquired company or takes that company public.

Private equity firms can be 'powerful partners' or 'formidable competitors'

Under the best circumstances, PE firms can increase a company's value using strategies that might not be suitable for public companies facing pressure for immediate shareholder returns. But PE firms are often portrayed negatively due to the aggressive strategies they sometimes use to cut inefficiencies. As PE has grown, many firms have changed their strategies, shifting away from aggressive scaling to more integrated acquisitions.

Carried interest is a share of the profits that a venture capital firm’s general partners earn

Also known as "carry" for short, carried interest is roughly 20% of a fund’s returns, but the exact percentage varies between firms.

Private equity's expansion into healthcare has been criticized for raising patient medical costs

Between 2000 and 2018, PE's total investment in healthcare ballooned from $5B to $100B. While healthcare systems originally began consolidating as a solution to navigating complex regulations (and to make working with insurance companies easier), research suggests that private equity has both increased patient costs and decreased the quality of care in hospitals and doctors' offices.

The first private equity fund was launched in 1960

At the time, the industry—and the public's understanding of it—was rather limited, and few private equity firms existed until the 1980s. The first leveraged buyout is thought to have taken place in 1955.

An initial public offering or 'IPO' is the process of a private company becoming public by putting shares of the company on the stock market for purchase.

Kohlberg Kravis Roberts was the world's largest private equity firm as of 2025

Headquartered in New York City, KKR raised more than $117B between 2020 and 2024. KKR is credited for pioneering the leveraged buyout strategy for private equity in the 1970s and now owns nearly 300 companies.

Why private credit is attractive to both businesses and investors

While investors are attracted to the high rates, private credit is particularly attractive to mid-sized businesses that are too small for bank syndication and want faster, more flexible financing options.

'Payment in kind' is a compensation method that uses alternatives to cash

Companies can make payments using goods, services, or additional securities instead of cash, helping companies preserve their cash flow. Public BDCs receive roughly 8% of their investment income via PIK.

Angel investors often receive significant equity because of the risk they take

Angel investors fund startups at an early stage, at which time a company’s success is less assured. In exchange, they often ask for a significant equity stake.

An initial public offering is how a private company becomes public

This milestone requires plenty of preparation, starting with the SEC's S-1 registration, revealing key details about the company's finances and strategy. Investment bankers set valuations, secure long-term investors, and finalize share pricing before the public launch. IPOs provide companies with significant capital, but also demand transparency and invite public scrutiny.

Real estate investment trusts help give portfolios more exposure to real estate

Also known as a REIT, a real estate investment trust is a type of company that invests in a portfolio of real estate, such as apartment buildings or malls. Investors can buy shares of the REIT to participate in its portfolio’s gains and losses.

An individual retirement account is a type of tax-advantaged investment account

An IRA lets individuals at most income levels invest either pre- or post-tax money for retirement. IRAs are often good solutions for people who don’t have the option to invest in a 401(k) plan—or for those who want to put even more money aside for retirement.

An expense ratio represents the cost to own an ETF over the course of the year

For instance, an expense ratio of 0.5% would add a cost of $50 on an investment of $10K. And while expense ratios have on average decreased in recent years, a particularly hefty fee can still eat into total profits.

Private mortgage insurance protects the lender rather than the borrower

Also known as a “PMI,” private mortgage insurance may be required for those who have a conventional loan and put less than 20% down on their home. A PMI could also be required for someone refinancing their mortgage if they have less than 20% equity remaining in the property.

Hedge funds, the private investment firms that trade a wide swath of financial assets, make money by imposing steep fees on investors and from the fund's investment performance.

'Floating rate' loans periodically adjust their interest rates in accordance with economic conditions

When the Federal Reserve began raising interest rates in 2022 to combat inflation, interest payments borrowers owed to private credit lenders increased accordingly. Private credit funds benefited as loan returns increased, making the asset class attractive to investors at the time.

Venture capital is a form of funding provided to early-stage companies with high growth potential, typically in exchange for an equity (or ownership) stake

PayPal's Peter Thiel turned his Roth IRA into $5B

In 1999, tech titan Peter Thiel had a Roth IRA with roughly $2K in it. By 2019, that tax-free account was worth $5B. For context, the average Roth IRA was worth roughly $39K at the end of 2018. Naturally, Thiel had a few investment options that the average person probably doesn’t have access to—but the story of his IRA’s boom is nonetheless fascinating.

The US Government sells two types of savings bonds: EE bonds and I bonds

EE bonds have fixed interest rates that the buyer is informed of when they purchase the bond. I bonds, however, earn a rate that can change every six months. A comparative chart details the most significant differences between EE bonds and I bonds.

An MBA return on investment calculator

On average, the total investment for an MBA degree is more than $200K, which includes tuition, living expenses, lost income, and potential interest on student loans. This calculator can help you figure out your own future MBA degree’s estimated ROI based on your unique situation.

A FIRE number is the amount of money someone needs in retirement

To calculate one’s FIRE number, FIRE followers typically multiply their expected annual expenses in retirement by 25.

Compound interest has been called the eighth wonder of the world

That's because it has the near-magical quality of helping financial investments grow exponentially. Rather than accruing a standard lump of simple interest annually, compound interest takes the previous year’s yield and reinvests it as part of the principal.

Warren Buffett's former professor Benjamin Graham is known as the 'father of value investing,' a strategy in which investors seek to buy stocks trading below their intrinsic worth.

Use this calculator to find the dollar value of your mental load, from meal planning to coordinating after-school care for your children.

In 2025, four executives from large tech companies were given positions in the US Army Reserves—including Palantir Chief Technology Officer Shyam Sankar, which reinforced Palantir's ties with the US military and its role as a leading defense partner.

Apeirophobia is an overwhelming fear of living forever, perhaps stemming from the brain's inability to conceptualize an infinite life.

The American Society of Civil Engineers' infrastructure report card gave the US a C in 2025, its highest grade since the project launched in 1998.

Read a deep dive on the 'all-purpose healing' peptide BPC-157.

Art theft is the third-largest source of criminal revenues worldwide, thanks in part to the subjective nature of valuing a work of art.

Fireworks-related ER visits are on the rise—in 2024, they increased by 52% as compared to the prior year.

Iran's Revolutionary Guard Corps is independent of Iran's regular army and is one of the most powerful and influential military-political organizations in the Middle East.

The price of gas is a composite made up of several different factors, with the federal gas tax making up less than 20% of what drivers pay at the pump.

Explore what it's like inside a patient isolation unit, used in situations such as treating a patient or suspected patient with Ebola.

Some coin denominations have ridges etched on their sides, partly to prevent counterfeiting, in a practice called 'reeding.'

Fast-casual restaurant Chili's is experiencing a resurgence, with its parent company recently reporting a nearly 32% increase in sales, thanks to passionate Gen Z fans on TikTok.

American short story writer Flannery O'Connor raised 40 peacocks, which became potent symbols for her fiction's elegant violence

A pickleball's loud 'pop' sound can reach 120 decibels, which is equivalent to a hammer hitting a nail

Poison ivy's characteristic rash is caused by an allergic response to an oily compound in the plant called urushiol.

Prince's sexually explicit 1984 track 'Darling Nikki' attracted the ire of the Parents Music Resource Center, an advocacy group that inspired the Parental Advisory sticker, even though the song ends with a Christian message.

Long before Major League Baseball began allowing instant replay for balls and strikes, an umpire reluctantly used the technology to determine whether a hit was a home run, a move that inadvertently ushered in a new era for the sport.

While El Niño moves warm Pacific Ocean waters east along the equator, La Niña moves them west, shifting where rainfall will become more common for months.

Pure water does not conduct electricity because this flow of energy requires the movement of charged particles, and water is a neutral molecule.

Corals are themselves not coral reefs—the term refers to the tiny marine invertebrates that build the rigid reef.

Take a 3D tour of the Hajj, Islam's annual pilgrimage to Mecca, undertaken by more than 1.5 million Muslims each year.