Publicly traded private equity

Publicly traded private equity (also referred to as publicly quoted private equity or publicly listed private equity) refers to an investment firm or investment vehicle, which makes investments conforming to one of the various private equity strategies, and is listed on a .

There are fundamentally two separate opportunities that private equity firms pursued in the public markets. These options involved a public listing of either:

Historically, in the United States, there had been a group of publicly traded private equity firms that were registered as business development companies (BDCs) under the Investment Company Act of 1940.

Typically, BDCs are structured similar to real estate investment trusts (REITs) in that the BDC structure reduces or eliminates corporate income tax. In return, REITs are required to distribute 95% of their income, which may be taxable to its investors.

As of the end of 2008, among the largest BDCs (by market value, excluding Apollo Investment Corp, discussed elsewhere) are: American Capital Strategies (NASDAQ: ACAS), Ares Capital Corp. (NASDAQ: ARCC), BlackRock Kelso Capital Corp, Gladstone Investment Corp (NASDAQ: GAIN) and Kohlberg Capital Corp (NASDAQ: KCAP).

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