The History of Private Equity

In 1901, the World's Wealthiest Investors Created Private Equity And Turned "Millions Into Billions"

Today, Individual Investors Can Finally Profit, Too An Investment U White Paper From the Investment U Research Team

The private equity market is on a tear…

The ultra-exclusive market reserved for only the ultra-wealthy elite has still been adding companies and generating hundreds of billions more to its bottom line.

And quite a few savvy investors are getting even richer… (See "How to Get Rich on the Private Equity Investment Boom.")

But while the private equity market has ballooned well over a trillion in recent years the history of private equity and its creation can be traced back to the town of Pittsburgh… and the year 1901.

That's the year J.P. Morgan bought Carnegie Steel Company from Andrew Carnegie and Henry Phipps for $480 million, the first trade on what would become the private market we know today.

In 1907, Phipps founded the Bessemer Trust, a "family office," to invest his $50 million in proceeds in private businesses and other exclusive holdings.

Today, Bessemer Trust continues to invest more than $46 billion in assets for the Phipps family and other mega wealthy American dynasties… To this day, it invests in privately traded companies, and it's even headed by Phipps' great grandson, Stuart Janney.

But it wasn't until after World War II that the private market really began growing…

Private Equity Returns 52,757%, Historically Speaking…

American Research and Development Corp. and J.H. Whitney & Company, two of the earliest venture capital firms, were both established in 1946. ARD was founded by Georges Doriot, the "father of venture capitalism," whose greatest investment was inarguably Digital Equipment Corp., which he bought for $70,000 and sold for $37 million – an increase of 52,757%.

As for J.H. Whitney, its most famous investment was an innovative method for delivering nutrition to U.S. troops, which came to be known as Minute Maid Orange Juice.

However, the private equity movement would not be what it is today, if it weren't for the events of 1958…