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May 22nd, 2012
10:04 AM ET

MYB: What is private equity?

The back-and-forth on the campaign trail over Gov. Mitt Romney's record at Bain Capital is back with a vengeance.

Newark Mayor Cory Booker and Newt Gingrich are both getting into the mix talking about private equity and Bain's track record, but exactly what is private equity?

In today's "Minding Your Business," Christine Romans explains that private equity is rich investors, like pension funds, university endowments and wealthy people, pooling their money to invest in things that will make them more money – like companies and new technology.

Often, these investors zero in on failing companies. The private money comes in and does some restructuring, which usually means selling divisions and closing failing parts, while reaping the benefits of the successful elements of the company.

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soundoff (2 Responses)
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    June 11, 2012 at 1:12 pm | Reply
  2. Tx Cristina your heart is real.

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    May 22, 2012 at 1:02 pm | Reply

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