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Abstract
Small and medium enterprises (SMEs) are the backbone of the private economy worldwide and make a substantial contribution to national socio-economic and entrepreneurial development.Consequently, there is increased interest by policy makers, practitioners, and academics in the nature and behavior of the financial markets that fund small businesses. This article sheds light on what the authors term “private” private equity, an overlooked segment of the industry not captured in the existing classification of PE firms but possibly subsumed in the angel capital category. Private PE shares many of the characteristics of organized, intermediated (institutional) PE but relies on funds from private investors rather than public capital markets via institutions. Private PE often buys into SMEs as long-term investors, rather than buying to restructure and sell.
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