A Management Buy-Out or Buy-In is a transaction sponsored by a financial investor whereby a management team purchases its employer or purchases an external company.

Management Buy-Out / Buy-Ins are usually financed with substantial levels of debt (shareholder loans and bank debt). That's why they are referred as "leveraged" buy-outs or LBO's.

This leverage causes the transaction to be more risky than full equity investments, but in return may result in higher returns on invested capital.