An Interesting Fact About Private Equity

I’m experimenting with a video blog entry today. The text follows below the video…

Private Equity in it’s loosest definition is the ownership of companies that are, well, private. This would be as opposed to ownership in companies that are public – such as any company that is listed on your favourite stock market – which is a public exchange. Another way of putting it, is that if a company does not have shares trading on a recognized public stock exchange, it is a private company.

Here is some interesting data about Private companies that you may not have known:

  • Of the 171,606 companies in the United States with revenues above $10 million per year, fully 151,345 of them are privately held companies – that’s 88%
  • Of the 30,120 companies in the United States with revenues above $100 million per year, fully 22,696 of them were privately held companies – that’s 67%

Data taken from 2002 research by Dun & Bradstreet’s Market Identifiers Database

So, when you invest in a portfolio of US stocks (active or indexed), are you missing out by only investing in 12% of the companies with revenues over $10 million per year if you “limit” yourself to publicly traded stock?

Preet Banerjee
Preet Banerjee
...is an independent consultant to the financial services industry and a personal finance commentator. You can learn more about Preet at his personal website and you can click here to follow him on Twitter.
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  • Sven

    Nice idea; video left you a little washed out (too bright).

    I like that you had the main points in text after, too.

  • Preet

    Thanks for the feedback Sven. Somehow the video became brighter after I recompiled it from the video editor. I saw that it was too bright, but since it was my first time, it took me quite a while to just get the web address on the video and then compress it – so I figured I would leave it at that and work on it next time. As I get more used to the tools, I hope to increase the quality. Thanks for your patience… :)

  • Dev Basu

    That’s pretty good for your first video post Preet. Remind me about sending you a copy of Camtasia, which will allow you to demonstrate a video of what you’re doing onscreen, accompanied by a voice-over.

    Cheers! — Dev

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