Eve 1k Questions 6 Answers 2 Best Answers 140 Points View Profile EveBeginner Asked: November 17, 20202020-11-17T18:51:44+05:30 2020-11-17T18:51:44+05:30In: Business What is the Difference Between Private Equity and Hedge Fund? Hi, What is the Difference Between Private Equity and Hedge Fund? Private Equity vs Hedge Fund? Which is better hedge fund or private equity? Are private equity funds liquid? Share Facebook Related Questions What is the Difference Between Publicity and Public Relations? What is the Difference Between Audit and Review? 1 Answer Voted Recent CrazyMan 17 Questions 1k Answers 1k Best Answers 53k Points View Profile Best Answer CrazyMan Guru 2020-11-17T19:18:13+05:30Added an answer on November 17, 2020 at 7:18 pm Difference Between Private Equity and Hedge Fund The ‘Private Equity’ and ‘Hedge Funds’ both are the investment types and often have similar profiles, but there are significant differences between the objectives and investments sought out by hedge funds and private equity funds. Here I will make you understand both the terms properly and go through the Difference Between Private Equity and Hedge Fund. In simple words word, private equity means raising equity privately. In case the investment is made by high net-worth individuals, institutional investors, pension funds, banks, insurance companies, etc., in a company that is not publicly held, or it is underperforming by employing leveraged buyout, this type of investment is known as private equity. It is an unregistered investment avenue, where the investor pools their money intending to have substantial interest and control in the organization. Private equity’s objective is to improve the performance and make significant changes in the firm to sell it at higher prices than initially invested. The hedge funds are alternative investments, where the pooled fund is used and employ a variety of strategies to earn revenue for the investors. The hedge fund’s main objective is to acquire the highest returns on investment as soon as possible. To achieve this, hedge funds investments are primarily made in highly liquid assets so that profits can be made quickly on the investments and divert the funds into other investments that are more immediately promising. Hedge funds are geared towards accredited investors, as they then need lesser SEC regulations than others. Private Equity vs Hedge Fund Private equity can be defined as the investment funds brought in by a privately held company. In contrast, hedge funds involve a collective investment vehicle and often open to high net worth individuals to invest in various securities using investment strategies. Private equity’s main objective is to acquire distressed and financially small companies, and after that selling it at a higher profit. At the same time, hedge funds are implemented to get the highest return in less time. In private equity, the investment is made directly by purchasing a private company. In contrast, in hedge funds, the investment is made in highly liquid assets that can be readily converted to cash like – stocks, bonds, currencies, etc. Overall the private equity is oriented towards long term investments, while the hedge fund is oriented towards short term investments and high profits in less time. 1 Share Share Share on Facebook Share on Twitter Share on WhatsApp Share on LinkedIn You must login to add an answer.Continue with FacebookContinue with GoogleContinue with Twitteror use Username or email* Password* Captcha* Remember Me! Forgot Password?