What type of funds do private equity firms create?

Private equity firms typically create multiple funds that specialize in various investment strategies, which is why the selection is accurate. These firms often establish funds aimed at different sectors or types of investments, catering to specific market opportunities or investor needs. For example, a private equity firm might launch one fund targeting buyouts of mid-sized companies, another focused on growth capital for startups, and yet another dedicated to distressed assets.

This diversity in fund creation allows private equity firms to leverage expertise across various industries and investment strategies. It enables them to attract a broader range of investors with different risk tolerances and investment preferences, ultimately seeking to maximize returns.

The other options do not fully capture the breadth of how private equity firms operate. Hedge funds are a distinct category, high-net-worth individuals can invest in private equity funds but they aren't exclusively focused on them, and real estate investments, while important, are just one of many potential focuses for private equity funds.