Private equity funds: A pillar for unlisted companies

Private equity funds are financial instruments used to support unlisted companies through medium- or long-term strategic investments. These funds bring together capital from institutional investors, high net worth individuals or management companies, with the aim of financing the development, restructuring or transfer of companies.

These investments can offer potentially attractive returns. They play an essential role in the economy by supporting innovative projects and creating value. However, it is essential to note that each investment must be carefully assessed in the light of each investor's financial objectives and risk profile.

Private equity, or private equity, consists of investments in unlisted companies. These investments provide companies with the financial resources and strategic expertise they need to achieve their growth objectives. Although risky, these funds offer the potential for high returns, particularly when the companies they support are successful over the long term.

Private equity funds offer a variety of strategies, adapted to different stages of a company's life cycle.

Development capital

This strategy involves supporting companies in their growth phase. The funds provide resources to finance development projects, the acquisition of new market share or business diversification.

Buy-out capital (or LBO)

In this approach, funds finance the purchase of a company, often in collaboration with internal or external management teams. This strategy is common in family business transfers.

Venture capital

Aimed at start-ups and innovative companies, this strategy targets companies with high potential but also a high level of risk.

Turnaround capital

This strategy targets companies in financial difficulty but with the potential for a turnaround. The funds provide resources and expertise to reorganise and revitalise the business.
Although these strategies offer growth opportunities, they also entail significant risks, linked in particular to the performance of the target companies and market fluctuations.
 

Investing in private equity funds has several advantages for investors

Access to private opportunities

These funds make it possible to invest in unlisted companies, which are often inaccessible via the traditional financial markets.

Portfolio diversification

Thanks to exposure to assets that are not correlated to the public markets, these investments can reduce overall risk.

Positive economic impact

By financing innovative projects or local businesses, the funds contribute to economic dynamism and job creation.

High potential returns

Although private equity involves risks, it can offer higher returns than more traditional investments.

Tax benefits

In some cases, particularly with venture capital funds (FCPR), investors can benefit from tax advantages, subject to compliance with specific conditions.
Past performance is no guarantee of future performance. Investors should be aware of the associated risks, including the possibility of losing all or part of their capital.

 

Private equity firms play a central role in managing funds and selecting investment projects. They evaluate target companies, implement strategies and actively support the companies financed to maximise their value creation. It is important to note that these investments entail risks, particularly due to the uncertainty of company performance and economic fluctuations.

Professional private equity funds (FPCI)

FPCIs are intended for a restricted circle of investors, usually institutional. They manage large-scale projects and offer specialised management to maximise the potential of targeted companies.

Venture capital mutual funds (FCPR)

FCPRs focus on unlisted companies and can offer tax advantages under certain conditions, enabling investors to reduce their tax exposure while supporting projects with high potential.

Private equity funds

Private equity funds are created for institutional investors. They aim to meet specific financial objectives, by investing in companies or projects tailored to investors' expectations.

Real estate investment funds

Property investment funds invest in property assets such as residential, commercial or industrial properties. They enable investors to diversify their portfolios with tangible assets, offering potential returns through the valuation of properties or the income generated by rents.

Innovation mutual funds

Innovation mutual funds offer a direct way of investing in unquoted, high-growth companies. These funds target innovative sectors such as biotechnology, artificial intelligence and clean technologies. By diversifying their portfolios in this way, investors can gain access to promising projects while reducing their exposure to traditional markets. Nevertheless, these investments are often risky, due to the technological challenges and uncertainties associated with the emergence of new markets.

Investing in a private equity fund requires a high entry ticket and a high risk tolerance. Although mainly aimed at experienced or institutional investors, some funds are accessible to individuals. Here are the key steps to investing in a private equity fund.

Identify the type of fund

There are different types of fund suited to different financial objectives, such as mutual funds (FCP), venture capital funds (FCPR) or professional funds. Each type of fund meets specific investment criteria, depending on the size of the entry ticket, the risk profile and the business sectors targeted. It is therefore essential to define your objectives clearly before making a choice.

Assess the risks

Private equity involves specific risks, linked to the performance of target companies, illiquidity and market volatility. It is crucial to analyse the fund's investment strategies, as well as the sectors of activity chosen, in order to assess profitability and the associated risks.

Getting support

The support of professionals specialising in private equity can prove decisive in guiding your investment choices. They can help you understand the opportunities available, choose the right fund for your risk profile and optimise your investment portfolio.

Favour diversification

To limit risk, it is essential to diversify your investments across several funds or business sectors. Diversification helps to balance potential gains and risks, by reducing the impact of fluctuations in a single sector or project on the portfolio as a whole.

Private equity funds are subject to strict regulations. They carry significant risks, including capital loss. It is essential to diversify your investments and consult a professional before making any decisions.

Private equity involves a number of risks that investors need to consider. One of the main risks is illiquidity, as investments in unquoted companies cannot easily be sold before a strategic exit, such as a merger or IPO. In addition, the success of the investment is highly dependent on the performance of the target company, which can be influenced by both internal factors (management, strategy) and external factors (economic developments, regulations). Private equity often involves companies that are developing, restructuring or in emerging sectors, which can expose them to greater risk. Finally, these investments may have a long-term horizon, meaning that capital may be tied up for several years before being recovered. It is therefore important for investors to carefully assess these risks in the light of their objectives and profile.

Eurazeo Wealth Solutions offers private equity investment solutions, giving individual investors access to unlisted companies. By combining strategic expertise and active management, Eurazeo supports projects with high growth potential while optimizing risks and returns. These funds offer a unique opportunity to diversify into innovative and dynamic sectors, with management possible from as little as €10,000, enabling investors to participate in high-potential projects.

Private equity investments entail risks, particularly relating to the illiquidity and performance of the companies targeted, which requires a thorough assessment before any investment decision is made.