Over the past few years Private Equity (“PE”) has become one of the most important investment activity in the corporate finance context. The purpose of this paper is to describe the PE industry and understand how this type of alternative financing affects target company performance. In addition, there will be a focus on the evolution and the current state of PE in Italy, with an analysis of empirical cases useful to demonstrate concretely the impact of funds on the companies dynamics. The first chapter of the paper provides an introduction to private equity by first defining the key aspects of this alternative investment activity.