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Understanding Private Equity
Understanding Private Equity
Understanding Private Equity
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What is Private Equity?

Published on
30/11/2022
1:12mn

Summary

Private Equity allows investors to invest in unlisted companies with specialized managers aiming for high returns by supporting fast-growing, well-managed businesses. Unlike the stock market, where judgement is quarterly, Private Equity offers an investment horizon of 5 to 7 years to develop and execute a business plan.

Written transcription

Frédéric Stolar: Well, private equity consists of investing in the capital of unlisted companies and delegating the management of these investments to highly specialized managers, with the aim of generating high returns on investment. These managers, in turn, choose to work with fast-growing companies positioned in buoyant markets and, above all, with top-quality management teams. But what also ensures the performance of private equity is the fact that management teams have between five and seven years to invest and deliver their business plan. In other words, they have a long time horizon compared with the stock market, where management teams are judged on a very short-term basis and everything is called into question every quarter. Examples of companies financed by private equity include Zoom, Netflix, Twitter and Doctolib.

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What is Private Equity?
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