What is the difference between PE and Principal Investments firms (i.e.- Macquarie Capital, etc)?

I'm not sure if I'm correct about this, but the only difference that I can see is that PE firms raise money from investors and invest on their behalf while Principal Investment, PI like Macquarie, used their balance sheet to invest.

Do PI firms have limited sectors/ target firms that they can invest in due to them using money from their balance sheet? Or is it unlimited because they can co-invest with their clients?

 

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