The private equity industry has grown markedly in the last 20 years and we know more than we used to about its effects on the economy. We also know that private equity funds have outperformed public equity markets over the last three decades, even after the fees they charge are accounted for. What have been less explored are the specific actions taken by private equity (PE) fund managers. PE firms typically buy controlling shares of private or public firms, often funded by debt, with the hope of later taking them public or selling them to another company in order to turn a profit. But how do PE firms decide which companies to buy? And what do they do once they buy them?