Buyout funds almost always put their money into established business unlike venture capital investors who typically focus on young or start-up companies. They also use debt to finance some of the transaction, invest more money than venture capitalists, and usually have control of the company they're investing in - whereas a venture capitalist will only own a part share.

There are several types of buyout transaction. These include:

MBOs - Management Buyouts. This is when the team of executives managing a particular company decide to buy it from the current owners.

MBIs - Management buy-ins. This is when a team of managers from another company buys a rival from the same sector.

LBO - Leveraged buyouts. All buyouts are leveraged (i.e. they involve debt). Leveraged buyouts are simply distinguished by the fact that they are initiated by buyout firms themselves - or by companies who are trying to sell a division - rather than by teams of managers.

To finance the deal, buyout funds typically use a company's assets as collateral for loans. This means that companies that already have high levels of debt are usually unattractive to private equity investors and won't usually be buyout targets.

Once a buyout fund has acquired a company, it may then borrow additional large sums secured against the company's assets and use some of that money to pay itself a dividend before it sells the company to a trade buyer or floats it on a stock exchange.

Private equity and venture capital jobs and careers fall into several categories. At the junior end analysts build financial models and crunch numbers to help establish whether an investment is viable; principals then play a key role in appraising whether to do a deal and managing the process if it goes ahead, and partners lead the fund, seek new investments and liaise with investors. Funds also employ investor relations and operations professionals.