Target: to achieve more than 2x the investment

Here, Frédéric Stolar introduces a key concept in institutional private equity: capital reuse (or recycling), which makes it possible to significantly increase investment returns without proportionally increasing the amount of capital invested. An Altaroc fund, taken on its own, already yields approximately 1.88x the return on the capital actually invested. But to exceed this threshold, one must think differently: no longer in terms of a single investment, but rather a succession of funds. The principle is simple: starting in the fourth year, the first distribution flows can be reused to finance the commitments of subsequent funds. This reduces the need for fresh capital while maintaining constant exposure. For example, across two successive vintages of €100,000, the investor actually commits only about €150,000 instead of €200,000, thanks to this recycling mechanism. Despite this, the total return remains equivalent, which automatically improves the multiple on the capital actually invested, bringing it to approximately 1.93x. Following this logic further, the effect becomes even more powerful. With six successive vintages, the maximum capital raised reaches approximately €310,000, but the multiple rises to approximately 2.35x. The capital works continuously, without any periods of inactivity, which optimizes the overall return. The effect becomes spectacular over the long term. Beyond six vintages, distributions from the initial investments are sufficient to fully finance future commitments. In other words, the investor no longer increases their capital outlay but continues to boost their performance. Over a 20-vintage period, the maximum capital remains around €310,000, but performance can reach more than 5.5x the initial investment over a horizon of approximately 30 years. This mechanism, used by institutional investors, demonstrates that the key to outperformance in private equity lies not only in fund selection but in discipline over time. The reinvestment of capital transforms an investment strategy into a true engine of long-term wealth creation by maximizing the efficiency of the capital committed.