Private Equity returns are generally higher than those of listed equities. In the US, Private Equity has outperformed the S&P 500 over 5, 10 and 20 years (with a 20 year annualised return of +9.9% vs. 5.9%1). In Europe, the results are similar, with an annualised performance of +15.06% for LBO funds versus +5.48% for the MSCI Europe2 . Moreover, thanks to its moderate correlation with the main asset classes, Private Equity is an excellent source of diversification.
1. Cambridge Associates, LLC. “U.S. Private Equity Benchmarks (Legacy Definition) Q2 2020 Final Report”
2. Performance calculated from the launch of the funds to the end of 2020. Invest Europe, “The performance of European Private Equity”, July 2021.
Private Equity has been gaining momentum in recent years. Global invested assets have reached USD 4.5 trillion1 in 2020, representing an annualised growth of +16.2% since 20151 . In the portfolios of wealthy private investors, the proportion devoted to Private Equity is expected to double by 20252.
1 ‘McKinsey Global Private Markets Review 2021’, April 2021. Data to March 2021.
2. Morgan Stanley Oliver Wyman – Wealth & Asset Management Report, 2021.
Far from exclusively financial or purely virtual products, Private Equity allows you to give real meaning to your asset allocation. You invest in companies that you believe in.
By financing companies that convince you and allowing them to grow, you actively participate in turning an idea into reality. As a direct investor, you may be involved in the development of the company.
Private Equity investing means buying majority or minority stakes in private companies.
This helps you to diversify your wealth, while financing the economy. You also interact with the companies you fund.
The outcome is capital gains on your holdings when you sell all or part of your initial investment in an IPO or trade sale.
And since you are one of the early shareholders, you will gain the most if the company is successful.
The world belongs to those who invest early.
INVEST DIRECT focuses on 3 types of Private Equity allocation:
Our vetting methods mitigate some of that risk. However, as is also the case with the stock market (e.g. Enron in the USA or WireCard in Germany), you may lose all or part of your invested capital.
These companies are privately held and therefore not listed on the stock exchange. As a result, you cannot sell your shares on an organised secondary market. However, we encourage companies to organise liquidity periods. This will allow you to offer your shares to other subscribers, at regular intervals and in full transparency with the companies.
Stock market listings provide a market value for your investment every day, which is not the case with Private Equity. To overcome this disadvantage, our platform provides you with a quarterly independent valuation of the securities you hold. However, this valuation may differ from the price received in a liquidity event (upwards or downwards). Furthermore, access to our platform is restricted to qualified investors.