The economic impact of private equity: between value creation and business transformation

Private equity as a growth driver for SMEs

Small and medium-sized businesses are at the heart of Europe's economic fabric. Yet many of them struggle to find the financing they need to grow, especially from traditional banks. Private equity fills this gap by providing equity capital that enables SMEs to invest in innovation, improve their competitiveness and accelerate their growth.

According to a study by France Invest, companies backed by private equity funds record average annual sales growth of 11%, compared with 3% for companies not financed by private equity. This difference can be explained by the strategic support provided by the funds, which help managers to structure their organization, expand internationally and prepare for mergers and acquisitions.

Creating jobs and safeguarding know-how

Private equity does more than just finance companies: it plays an active role in preserving and creating jobs. By investing in companies in difficulty or in transition, funds play a key role in safeguarding local know-how and preserving jobs.

One notable example is that of funds specializing in LBOs, which take over companies in the context of family succession or restructuring. Rather than seeing these companies disappear for lack of buyers, private equity funds ensure their continuity, while providing the resources necessary for their transformation.

Innovation at the heart of investments

Innovation is a key driver of value creation for private equity funds. By financing technology start-ups or helping traditional companies to integrate innovations, the funds help to boost the economy and strengthen European competitiveness.

The sectors most supported by private equity are technology, healthcare and renewable energies. These investments not only respond to major societal challenges, such as the energy transition or the aging of the population, but also create new economic opportunities.

The ecological and social transition

Private equity funds are increasingly incorporating environmental, social and governance (ESG) criteria into their investment strategies. This responsible approach meets growing investor demand for investments with a positive impact on society and the environment.

By supporting companies committed to the ecological transition, private equity funds play a key role in decarbonizing the economy and promoting sustainable growth. They also play an active role in improving corporate governance practices, by promoting diversity on boards of directors and strengthening internal controls.

A catalyst for economic transformation

Private equity is much more than just a lever for financial returns. By financing innovation, supporting SME growth, creating jobs and promoting responsible practices, it plays a fundamental role in the transformation of the European economy.

For investors, choosing to invest in private equity means more than just seeking high returns. It also means supporting meaningful projects and playing an active part in tomorrow's economic dynamic.