What is the distinction between private and public equity investments?

Private equity investments and public equity investments differ in several ways. Private equity investments occur when investors purchase equity in a privately-held or non-public company. Public equity investments, on the other hand, occur when investors purchase equity in a publicly-traded or publicly-held company. Private equity investments involve a much higher level of risk than public equity investments, as they typically invest in unproven companies with limited information about the firm. Private equity firms will often place special restrictions on the sale of securities in order to protect the interests of the investors. This often results in investors having limited ability to resell shares, or even being unable to do so at all. Public equity investments, on the other hand, typically involve less risk. Investors can purchase and resell shares of publicly-traded companies without special restrictions, and the companies are subject to Securities and Exchange Commission (SEC) regulations that provide for transparency and disclosure of financial information. Public equity investors are also able to track the market value of their investments more easily than those investing in private equity. In New York, private equity investments are governed by state law, which imposes restrictions on the offer, sale, and transfer of securities. Public equity investments are subject to both state and federal securities laws, which provide for greater regulation and disclosure.

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What is the distinction between private and public equity investments?

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