Carveout (noun): A carveout is a form of financial transaction in which a company or organization divides and sells off part of its holdings or assets to another party. Carveouts involve the publication of new stock shares, which are then purchased by an acquiring entity in exchange for cash/equity or loan securities. The process allows companies to quickly raise capital, either through an initial public offering (IPO) or a secondary sale, while giving investors access to a new asset class with potentially high returns. Carveouts create unique investment opportunities for both buyers and sellers, who benefit from increased liquidity and portfolio diversification.