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Investments: taking the long view with private equity

The market for investment in unlisted companies continued to deliver good returns, despite a correction in 2023.

If you would like more information about our unlisted investment solutions, please contact us

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Interview with our Director of Partner Relations

Maxime Vanneaux was interviewed by Challenges magazine on the outlook for the unlisted market.

To read the article: https://www.challenges.fr/patrimoine/placements/placements-voir-a-long-terme-avec-le-private-equity_881165

Discover our offer to invest in unlisted funds

The unlisted investment market at a glance

The unlisted market encompasses investments made in unlisted companies, which are not listed on public stock exchanges. This means that their shares are not available for purchase or sale on financial markets open to the general public. The unlisted investment market offers investors, including high-net-worth individuals and institutions, the opportunity to invest in private companies, startups, growing SMEs, or even real estate and infrastructure projects.

Key features

  • Illiquidity: unlisted investments are generally less liquid than those on the stock market, as there is no established secondary market for the rapid resale of holdings.
  • Long investment horizon: investors in unlisted companies often need to commit to a longer period (usually 5-10 years) to allow their investment to mature and realize its full value potential.
  • High-return potential: despite higher risk, unlisted companies can offer potentially higher returns than the stock market, thanks in part to the possibility of investing in companies in a growth phase.
  • Portfolio diversification: investing in unlisted companies enables investors to diversify their portfolios beyond traditional listed assets.

Investment vehicles

To access the unlisted market, individual investors can use a variety of vehicles:

  • Private equity funds: investing in private companies at different stages of their development. These funds can specialize by business sector or by type of transaction (LBO, expansion capital, venture capital).
  • Venture capital funds: these funds specifically target start-ups and innovative companies with high growth potential.
  • Infrastructure funds: invest in large infrastructure projects (energy, transport, telecommunications) that require substantial capital and have a long investment horizon.
  • Non-listed real estate funds: these funds enable you to invest in diversified real estate projects without having to manage the properties directly.

Risks and considerations

Investing in unlisted companies, whether ETIs, SMEs or start-ups, offers attractive potential returns, but also presents a number of risks:

  • Liquidity risk: the difficulty of selling the investment quickly can pose a problem if liquidity is needed.
  • Valuation risk: the valuation of unlisted companies is complex and may not reflect their true worth.
  • Risk of capital loss: as with any investment, there is a risk of partial or total loss of the capital invested.

In short, the unlisted market offers attractive investment opportunities for investors seeking portfolio diversification and high potential returns. However, these opportunities are accompanied by specific risks that need to be carefully assessed and managed. Private banking professionals play a key role in guiding their clients through this complex market, providing expertise and tailored strategic advice.

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