Anyone work for Merrill Lynch, Morgan Stanley or other financial?

[collegiateLifter]

That is the definition of private equity - no exit route via the second market.

Ahhh i suppose that depends on your conception of the definition.

In my book a share of a company has an intrinsic value. The market's "valuation" is an entirely different matter.

 

[Mandinka2]

Ahhh i suppose that depends on your conception of the definition.

In my book a share of a company has an intrinsic value. The market's "valuation" is an entirely different matter.

Equity is "private" when it is not publicly traded. That's why you cannot exit out of it. Typically private equity funds will choose to invest in one or a number of companies , with many of these funds specialising in a specific type of equity capital provision - venture , seed , development , restructuring or buyouts/buyins.

You are correct in saying that a share of a company possesses an intrinsic value since shareholders are entitled to residual profits and assets but that intrinsic value can even be negative depending upon the method of incorporation/construction with Lloyd's syndicates being (in)famous examples of unlimited liability structures. Since these shares are not traded on any exchage then the funds themselves typically derive subjective values of their securities (so called marking to market) , but typically these values do not demonstrate the true volatility of the underlying value or indeed their true worth (hence a bias).