Why invest in unlisted companies? Private equity strategies and valuation

At a time when financial markets are increasingly volatile, investing in unlisted companies represents a relevant alternative for investors seeking diversification, stability and high performance potential. This form of investment, also known as private equity, provides access to companies with high growth potential, often in a development or transformation phase.

While unlisted investments offer significant advantages in terms of long-term valuation, they also require careful management of the specific risks involved. Eurazeo Wealth Solutions can help you understand and structure this type of investment.

Unlike listed companies, unlisted companies are not traded on stock exchanges. Instead, they raise capital via private investors, usually through specialized funds. These private equity investments support the real economy, while offering higher potential returns than traditional investments.

A growth lever for your assets

Unlisted shares can generate significant value over time. By investing in an innovative SME or a fast-growing ETI, you become a player in its development - while capitalizing on its success.

Diversification uncorrelated with listed markets

Unlisted companies evolve according to cycles that are independent of those of the stock markets. As such, they are an excellent diversification tool, complementing more traditional investments such as mutual funds or listed shares.

An investment less exposed to daily volatility

As unlisted shares are not continuously quoted, they are not subject to instant market fluctuations. This allows us to focus on a company's intrinsic performance and long-term strategy.

Eurazeo's private equity expertise

Eurazeo, a leader in private equity, offers investors the opportunity to support fast-growing companies and gain access to innovative projects via specialized funds. Thanks to its cutting-edge expertise, in-depth market knowledge and ability to identify key growth sectors, Eurazeo guides its partners towards strategic financial investments in high-potential unlisted companies.

Investing in unlisted companies involves a certain complexity. Understanding the risks involved is essential to structuring an allocation consistent with your investor profile.

Liquidity risk

It can be difficult to sell unlisted shares without a liquidity event (IPO, buyout, merger, etc.). The investment horizon is therefore often long.

Risk of capital loss

The success of an unlisted company is never guaranteed. In the event of strategic failure or operational difficulties, investors may lose all or part of their capital.

Lack of transparency

Unlisted companies are not subject to the same disclosure requirements as listed companies. This calls for rigorous analysis, particularly by experienced managers like those at Eurazeo.

The valuation of an unlisted company is based on proven financial analysis methods, combining economic data, growth projections and comparables.

Market comparison method

This consists of comparing the target company with listed or unlisted companies in similar sectors, using multiples such as Price/Earnings or EV/EBITDA.

Discounted cash flow (DCF)

This method anticipates future cash flows generated by the company, discounted at a rate reflecting its level of risk.

Comparable transactions

A pragmatic approach that takes into account recent transactions involving comparable companies in the same sector.

Asset valuation

This approach is based on the net value of assets held (real estate, equipment, patents), and applies in particular to industrial companies or companies with strong tangible roots.

Unlisted investments offer a wide range of strategies to suit your investment objectives, time horizon and risk appetite.

Participate in specialized private equity funds

Development capital or buyout capital funds give you access to a diversified portfolio of unlisted companies, selected by experts and allowing you to invest as an investment fund. Discover our approach via Eurazeo Private Equity.

Including unlisted companies in a PEA-PME

The PEA-PME offers a tax-advantaged framework for investing in unlisted French SMEs and ETIs. It's a relevant tax and wealth management lever to explore as part of your overall strategy.

Crowdfunding or direct fundraising

Participatory platforms provide direct access to certain growth companies, but with higher risk in the absence of professional intermediation.

Anticipating the exit from the outset

An investment in an unlisted company can lead to a number of outcomes: resale to a manufacturer, family transfer, or flotation on the stock market. These options need to be analyzed in advance.

Eurazeo is one of Europe's leading private equity firms, offering private investors accessible, co-invested solutions alongside institutional investors. Our approach is based on rigorous selection, transparent governance and a sustainable investment strategy.

Our teams identify the most promising opportunities in high-impact sectors such as energy transition, healthcare, tech and infrastructure. To find out more, read our article: Private equity: a driver of long-term performance.

Investing in unlisted companies enables us to structure a more resilient portfolio, focused on the real economy and long-term trends. In return for their low liquidity, these investments offer significant potential for value enhancement.

Adopting a disciplined approach, relying on experienced professionals and integrating this asset class into a coherent wealth management logic are the keys to success when investing in unlisted companies.