Private equity funds are investment funds that pool capital from high net worth individuals, pension funds, endowments, foundations, and other institutional investors to invest in private companies. Private equity funds typically invest in companies that are not publicly traded and are often in need of capital to expand their operations, restructure their balance sheets, or finance a merger or acquisition. Private equity funds typically take an active role in the management of the companies they invest in, and often seek to exit their investments through an initial public offering or a sale to a strategic buyer.