Private Equity vs Public Equity
Compare control and confidentiality of private markets with the liquidity and visibility of public markets to choose the right path in 2026
Quick comparison
Key differences at a glance
- Aspect
- Private Equity
- Public Equity
What is Private Equity?
Private equity firms acquire control of companies, drive operational improvements and strategic repositioning, and exit via sale or IPO within 3–7 years.
Core Activities:
- • Majority buyouts and recapitalizations
- • Operational transformation and KPI cadence
- • Add‑on acquisitions and integration
- • Executive hiring and governance
- • Exit via strategic sale or IPO
What is Public Equity?
Public equity refers to ownership in companies listed on stock exchanges. It provides broad investor access, daily liquidity, and ongoing disclosure requirements.
Core Attributes:
- • Access to large, diversified capital pools
- • Continuous trading and price discovery
- • SEC/market disclosure and governance
- • Analyst coverage and brand visibility
- • Follow‑on offerings for additional capital
Economics and returns
How value is created in each path
Private Equity
Operational value creation + leverage
- Management Fee~2% of AUM
- Carried Interest~20% above hurdle
- Return DriversEBITDA growth, multiple expansion, deleveraging
- Typical Hold3–7 years
Public Equity
Scale efficiencies + lower cost of capital
- Financing CostsLower long‑term cost via public markets
- Return DriversRevenue growth, margin expansion, dividends/buybacks
- Investor BaseInstitutional + retail, index inclusion
- HorizonPerpetual, quarter‑to‑quarter reporting
Liquidity vs Control: choosing your path
Three scenarios to decide between private and public equity
Owner liquidity + confidentiality
If you need liquidity with minimal disclosure and prefer an operational partner, a private equity recapitalization can provide cash at close and a plan for growth.
Scale capital + brand visibility
If you have predictable performance and want broad investor access, an IPO or direct listing can reduce cost of capital and elevate brand awareness.
Hybrid path
Some companies partner with PE to professionalize and grow, then go public later. Consider timing, readiness, and governance before moving to public markets.
The role of VDRs for PE processes and IPO readiness
From diligence to S‑1 drafting and investor roadshows
Private Equity
- • Buy‑side diligence and integration rooms
- • Board reporting and portfolio oversight
- • Exit rooms for strategic/financial buyers
Public Equity / IPO preparation
- • Document centralization for S‑1 drafting
- • Link controls for analyst and investor access
- • Page analytics to tailor the roadshow narrative
Frequently asked questions
Common questions about private and public equity
Is going public always cheaper than private capital?
Not always. While long‑term cost of capital can be lower in public markets, IPO and ongoing compliance costs are significant. Private capital can be faster with fewer disclosure requirements.
Can a PE‑backed company go public later?
Yes. Many companies professionalize under PE ownership and then pursue an IPO to access broader capital and provide liquidity to investors.
What about control after going public?
Founders can retain influence via dual‑class structures or significant stakes, but public companies must adhere to independent board requirements and shareholder governance.