Inside Private Equity - Issue of February 26, 2025

In this 10th episode of Inside Private Equity, the show focuses on a very practical question for investors: how to effectively invest 10% of one’s assets in private equity. Frédéric Stolar explains that institutional investors adopt a three-pronged approach: defining the risk-return profile, choosing a long-term time horizon, and clarifying the investment objective (regular income or capital appreciation). Contrary to popular belief, they do not deploy their capital all at once but spread their investments over time, committing a portion of the capital each year to diversify entry points and reduce cyclical risk. The Esker Group’s success story perfectly illustrates the synergy between public markets and private equity. After years on the stock market, the company chose to delist to accelerate its growth with the support of specialized funds. This transition from public to private ownership shows that private equity is not merely an initial phase but can also become a strategic lever for reaching new stages of development, particularly in complex technological environments such as artificial intelligence.The episode also highlights major market trends with a focus on fundraising. Following a slowdown in 2024, investors are gradually returning with a more selective and strategic approach. The sector is polarizing between winners and losers, with strong demands for value creation, specialization, and the relevance of strategies. Market consolidation is accelerating, while new geographic regions such as Asia and Latin America are gaining importance. The sector spotlight on software confirms its status as a pillar of private equity. Thanks to recurring revenue, strong profitability, and growth prospects linked to the cloud and AI, this sector is attracting massive amounts of capital. Critical software (“systems of record”) offers strong barriers to entry and high resilience, reinforcing its appeal despite sometimes high valuations.Finally, a wealth management advisor notes that private equity is gradually becoming accessible to private investors. It allows for portfolio diversification, improved returns, and participation in the real economy, provided investors have the right guidance and adopt a long-term perspective. Allocation typically ranges from 5% to 25% depending on the investor’s profile.