Which of the following is a common characteristic of private equity investments?

Private equity investments are typically characterized by an active involvement in the management and operations of the companies in which they invest. This hands-on approach often includes providing strategic guidance, improving operational efficiencies, and making significant changes to enhance the company’s performance and ultimately increase its value.

Investors in private equity generally take a long-term approach, typically holding investments for several years. This long-term commitment allows for the necessary changes and improvements to be implemented effectively, which can significantly enhance the overall returns by the time the investment is exited, typically through a sale or public offering.

This active management distinguishes private equity from other investment vehicles, such as publicly traded stocks, where investors usually have little to no direct influence over company operations.