Which investment type involves buying into private companies or delisting public companies?

Study for the Portfolio Management Test. Enhance your skills with flashcards, multiple choice questions, hints, and detailed explanations. Prepare effectively for your exam!

The investment type that involves buying into private companies or delisting public companies is private equity. This type of investment focuses on acquiring ownership stakes in privately-held businesses or buying out public companies to take them private, allowing for more control and flexibility in management and operations.

Private equity firms raise capital from investors and use this capital to acquire companies, often aiming to improve their performance before eventually selling them for a profit. The goal is typically to enhance the value of the companies through strategies such as restructuring, operational improvements, or strategic investments, and eventually exit through a sale or public offering.

In contrast, venture capital primarily focuses on investing in early-stage startups and emerging companies with high growth potential, not necessarily buying out established private companies or delisting public ones. Real Estate Investment Trusts (REITs) concentrate on investing in income-producing real estate assets and do not engage in the private equity acquisition of companies. Crowdfunding allows individuals to invest small amounts into startups or projects but does not involve the direct acquisition of companies in the manner that private equity does.

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