Private Placement

A private placement is a direct private offering of securities to a limited number of sophisticated investors. It is the opposite of a public offering. Investors in privately placed securities include insurance companies, pension funds, mezzanine funds, stock funds and trusts. Securities issued as private placements include debt, equity, and hybrid securities. In the United States, private placements are exempt from public registration under the Securities Act of 1933. The exemption from registration for a private offering is contained in Regulation D of the Securities Act of 1933. While the procedure for conducting a private placement pursuant to the exemption is less stringent than for that of a public offering, the process requires a careful compliance with the terms and restrictions of Regulation D.
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The sale of a bond or other security directly to a limited number of investors. Used in the context of general equities. For example, sale of stocks, bonds, or other investments directly to an institutional investor like an insurance company, avoiding the need for S.E.C. registration if the securities are purchased for investment as opposed to resale. Antithesis of public offering.

The process of negotiating for the sale of securities, debt, equity, or a combination thereof to a relatively small group of investors.