A long and committed investment period
Private equity is an illiquid investment. In practical terms, capital is generally committed for a period of 7 to 10 years.
This lack of liquidity implies:
- A long-term investment horizon
- A thoughtful approach to heritage
- The ability to tie up capital over time
In return, this patience allows us to aim for higher levels of performance than on listed markets.
What returns can be expected from private equity?
Historically, private equity has outperformed public markets over the long term. On average, it has delivered approximately 12% per year net of fees, depending on the period and strategy.
These results can be explained in particular by:
- Operational value creation
- Growth of supported businesses
- Less exposure to daily volatility in financial markets
However, it is important to remember that past performance is not indicative of future results and that fund selection is crucial.
What is private equity?
Investing in private equity means supporting unlisted companies, generally SMEs or mid-sized companies. These companies often have one of the following profiles:
- They are already profitable.
- Or they are growing rapidly
- They need capital for:
- accelerate their development
- fund a strategic transformation
- organize a transfer or takeover
Rather than relying on the stock markets, these companies turn to private equity funds to support their growth trajectory.
The role of private equity funds
A private equity fund does more than just provide capital. It plays an active and strategic role, generally over a long period of time.
Support for businesses is provided through:
- Targeted financial investments
- Major strategic decisions
- External growth operations (acquisitions)
- Improved operational performance
The objective is clear: to create value over several years before selling the stake under favorable conditions.
Private equity: a patient and strategic investment
Private equity is not a short-term investment. It is intended for investors who are looking for:
- Exposure to the real economy
- A logic of sustainable value creation
- Diversification from listed assets
It is a patient investment, part of a long-term asset management strategy that supports businesses and economic growth.
