Private Equity is an asset class focusing on equity in non-public companies. Technically, even Venture Capital is a part of PE. But people have started using the term PE for investing in mid to late stage companies, and the term VC for investing in early stage companies. In other words, PE invests in growth, makes leveraged buyouts or buys distressed assets. Recently VCs are also getting into the growth stage, making the distinction between PE and VC difficult.

A lot of MBA students in top business schools dream of getting into PE firms after MBA. But only those who have some finance background (Investment Banking, for example) have a realistic shot of getting in.