The PE industry has evolved in recent decades, ranging from the way funds are structured to how transactions are financed. In one important aspect, however, the industry has been largely stagnant: its commitment to common equity. That is slowly changing as preferred equity becomes more consistently integrated into different types of transactions, including minority stake investments in PE sponsors and GP‑led restructurings of funds. The coronavirus pandemic has offered other opportunities as well, as fund-level preferred equity issuances are becoming popular sources of rescue capital for portfolio companies in need of capital infusions. To help familiarize sponsors with the common features and potential uses of preferred equity, the Private Equity Law Report interviewed Weil partners Brian Parness and Stephanie Epstein Srulowitz. This first article in a two-part series outlines the core features and multiple permutations of preferred equity, as well as typical terms and conditions associated with the asset class. The second article will identify certain risks for sponsors to avoid if they decide to issue fund-level preferred equity, while also forecasting the future trajectory of preferred equity in the industry. See our two-part series: “Types of Rescue Capital PE Sponsors Can Pursue to Help Their Portfolio Companies Survive the Pandemic” (Jun. 9, 2020); and “Key Terms, Process Considerations and Potential Issues When Providing Rescue Capital to Distressed PE Portfolio Companies” (Jun. 16, 2020).