Inside Private Equity - The Big Debrief, 24 April 2024

This Inside Private Equity Grand Debrief follows up on the episode dedicated to private equity by answering questions from the audience with Aleksandra Putra, Edouard Debost, Frédéric Stolar, Alexandre de Vigan, and Louis Flamand. The discussion begins by noting that investing in private equity involves taking on risk, particularly the risk of illiquidity over the long term. Frédéric Stolar explains that funds may lose money on certain investments, but that diversification—particularly through funds of funds—allows this risk to be spread across several hundred positions. The discussion then turns to the role of private equity in a company’s trajectory. Alexandre de Vigan, founder of Nfinite, details the use of raised capital, the need to restructure the company following a major fundraising round, and the importance of dialogue with investors. Private equity does not merely provide capital: it instills discipline, ensures regular monitoring, and offers strategic guidance. Several questions focus on valuation, exiting investments, and the optimal timing for investment. The speakers explain that a fund considers the exit strategy from the moment it acquires a stake, while adapting its strategy to market developments. A sale to an industrial buyer is often preferred over an IPO, as it can offer a more attractive strategic premium. The most sought-after sectors are also discussed. Tech, SaaS software, data, healthcare, and digital services attract funds due to their growth potential, recurring revenue streams, and resilience. However, experts note that significant opportunities also exist in other sectors, provided the company has a solid business model, a clear competitive advantage, and growth prospects.Le Grand Debrief also highlights the growing accessibility of private equity to private investors. While large institutional investors remain dominant, individuals, family offices, and high-net-worth clients are playing an increasingly significant role. For them, the challenge is to build an allocation tailored to their assets, investment horizon, and tolerance for illiquidity. Finally, the program emphasizes the entrepreneurial dimension of private equity. The entrepreneur remains at the heart of the process: it is he, along with his teams, who creates value. The fund’s role is to support him, much like a coach supports a top-level athlete, by providing capital, high standards, a network, methodology, and support at key moments in his development.