While I would agree that the comment you're responding to is probably using the term incorrectly, there is definitely such a thing as insider trading in private equity.
Knowing that a public company is about to be taken private by a friend's PE firm is material non-public information (MNPI).
Knowing that a PE-backed company is about to be bought by a public strategic acquiror is MNPI.
Knowing that sales of a private company's products to a public company are changing rapidly is MNPI (think of knowing the order pipeline for an electronics manufacturer who sells to Apple).
Trading on any of this MNPI would absolutely count as insider trading, and is watched closely by PE/VC firms, who are all regulated by the SEC and FINRA (in the US, at least)
This MOI story seems to come up every few years, but McKinsey has kept everything so private that typically all the articles can say is "MIO seems suspicious, and may be conflicted"
Knowing that a public company is about to be taken private by a friend's PE firm is material non-public information (MNPI). Knowing that a PE-backed company is about to be bought by a public strategic acquiror is MNPI. Knowing that sales of a private company's products to a public company are changing rapidly is MNPI (think of knowing the order pipeline for an electronics manufacturer who sells to Apple).
Trading on any of this MNPI would absolutely count as insider trading, and is watched closely by PE/VC firms, who are all regulated by the SEC and FINRA (in the US, at least)
This MOI story seems to come up every few years, but McKinsey has kept everything so private that typically all the articles can say is "MIO seems suspicious, and may be conflicted"
A few past articles: https://www.wsj.com/articles/mckinsey-investments-werent-dis... https://www.ft.com/content/7c6700bc-2976-11e6-8b18-91555f2f4...