When private equity managers invest in companies, they don't just inject capital: they transform it into a long-term growth driver, generating solid returns. By optimizing value creation over the long term, Private Equity generates solid, consistent performance. This ensures the sustainability of benefits paid out, and is an essential lever in the financing of pensions.
In order to transform companies into catalysts for sustainable growth, the funds intervene directly in their management. Their watchwords are streamlining operations and improving cost management.
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General Atlantic's proven strategy
General Atlantic, a world leader in Growth Equity, is a model of these investment strategies, which focus on transforming companies. One of the keys to its approach lies in its ability to sustainably improve the performance of portfolio companies.
His approach is based on four levers: optimizing costs, improving profit margins, developing new sources of revenue, and providing strategic and managerial support. The manager focuses on the technology sector, targeting solid companies with organic growth of over 15%.
In each acquired company, the firm sets up a specialized "Growth Acceleration" management team. Its role is to provide operational and strategic support tailored to the unique needs of each structure (sales, marketing, finance, technology, etc.). By overseeing these periods of transition and transformation, General Atlantic ensures both significant value creation for the company and an efficient long-term return for its investors.
Tailored approaches for successful restructuring
Its strategy is also based on the selection of companies operating in sectors geared to long-term global growth, mainly in the transition to the digital economy and new cycles of technological innovation. Over 80% of the portfolio focuses on companies with a digital dimension. This strong specialization benefits the expertise of the Growth Acceleration team. A winning strategy. General Atlantic 's loss rate on its investments is less than 9% over 15 years.
In June 2023, the acquisition of a 20% stake in ATOSS, a publisher of human resources software, testifies to this success. The Munich-based company took advantage of the fund's expertise in digitalization and cloud services to pursue a policy of internationalization and diversification of its activities in cloud 25.
Another example is the $108 million investment alongside the SoftBank Latin America Fund in Acesso Digital. This Brazilian company specializes in digital identity and facial recognition. A booming sector in Brazil, supported by political decisions such as the introduction of a blockchain-based digital identity card. For its part, Acesso Digital has taken advantage of this fundraising to expand its offering and increase its customer base, while exploring strategic acquisition opportunities 26.
An ideal strategy for financing pensions
This proactive, personalized approach to portfolio company development is private equity's greatest asset in meeting the challenges of pension systems. Double-digit returns, superior to those of traditional indices, demonstrate its ability to deliver solid, stable growth. In this way, the asset class meets the imperatives of sustainability, guaranteeing payments to millions of current and future beneficiaries.
Business ID card
General Atlantic : investments around the world
Founded in 1980, General Atlantic is one of the oldest management companies specializing in Growth Equity. The firm is distinguished by its extensive international coverage, spread across sixteen offices in five regions of the world, employing over 450 people. It also stands out for its ability to finance two-thirds of its investments without recourse to debt.
General Atlantic manages over $90 billion in private equity assets. Its preferred sectors are software, B2C digital, healthcare and B2B services. The company is independently owned by nine partners.
24 https://www.altaroc.pe/private-equity-performances-et-risques
25 https://www.atoss.com/en/company/investor-relations/news/general-atlantics-invests-in-atoss
26 https://www.lavca.org/general-atlantic-and-softbank-lead-us108m-series-b-in-acesso-digital/
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