Private equity is investment in privately held companies through negotiated ownership interests rather than shares traded on a public exchange.
Definition
For a civil engineering firm owner, private equity usually means capital invested by a fund or investor group in exchange for an ownership stake. The investment may give the investor control or a minority position, and may support an acquisition, growth plans, or a partial sale by existing owners. Terms can cover governance, reporting, future funding, management roles, and how an investor may exit. These vary by investor and transaction, so the label alone does not tell you what will happen to the firm. Private equity is not a single deal structure, a guarantee of growth, or the same as borrowing money. Owners comparing options can review how a transaction affects ownership and succession, alongside other mergers, valuation, and succession considerations and ownership transition paths.
How owners use it
- Compare a proposed investment with a full sale, internal succession, or continued independent ownership.
- Review the proposed ownership share, governance rights, funding obligations, and expected exit terms.
- Example: If an investor buys 40% of a firm, existing owners retain 100% - 40% = 60% ownership, subject to the transaction documents.
- Use the investment terms to frame questions about leadership roles and the firm's plans after closing.
