What is Private Investment in Public Equity (PIPE)?

Private Investment in Public Equity (PIPE) is an investment type that doesn't involve capital allocation in publicly traded companies, opting instead for private company investment. Private equity investing is typically carried out by investment funds that directly buy, sell, and invest in companies that are not publicly traded on a stock exchange. Private equity investing is usually dominated by large institutional investors, pension funds, venture capitalists, and other accredited investors because of their ability to influence the direction of the companies they invest in — and the potential to generate greater returns than with publicly traded companies.