Unlike a listing on the New York Stock Exchange or Nasdaq, private share placements don't require a company to register with the Securities and Exchange Commission.
Private equity firms and hedge funds are both known for their mystique, and many prefer to keep it that way. Companies who place shares privately must disclose details of their business to their investors, but not on a scale required by the SEC.
"Public offerings take longer and require much more involvement," said Wilbur Ross, the turnaround expert who sold his private equity firm to Amvescap last year.
Less onerous reporting requirements may make private placements appealing to a number of companies struggling to comply with public reporting rules, not just those who traditionally prefer to stay out of the spotlight.
