Investing in Private Markets instead of only the Stock Exchange

Did you know that a rapidly expanding market for private investments in companies has emerged away from the stock exchange? By mid-2022, the total global value of Private Markets was estimated at around
USD 11.7 tn* *McKinsey Global Private Markets Review 2023
. Experts believe that this is likely to multiply over the next few years.

  

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Delegate research – participate in performance

Included in the field of private markets are start-ups, but also established companies who do not wish to be subjected to the volatility of public stock exchanges. Instead, they prefer to seek investors who are willing to commit their capital on a long-term basis.

Investors seeking to invest in private markets, often find themselves confronted by two challenges - one: “how do I get access to investment opportunities before the company makes headlines in the mainstream?” And secondly: “How can I sort the chaff from the wheat (i.e., the performers)?” This is exactly where the many years of our experts’ experience comes into its own.

  

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Profitable long-term investment

Investments in private markets are considered “illiquid”: an investment horizon amounting to several years is considered usual. And, historically, it is exactly that longer period that gives rise to the returns potential of private markets. The long investment horizon enables investors to become active managers, cooperating on making long-term decisions thus allowing a company's potential to be fully exploited.

Because the minimum investment amounts are often high, it is important to align the investment with your personal financial goals and to review it in the context of individual risk appetite.

  

  

The three main reasons for Private Equity

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1. Returns potential

Widely reported, private market investments have been able to generate above-average returns in recent years.

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2. Unique investment opportunities

Private market investments offer investors access to investment opportunities not available on the public markets.

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3. Enhanced diversification

The unique characteristics of private market investments can help improve the risk-return ratio in a portfolio context.

 

  

If you would like to find out more about our offering, please contact our experts.

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Essential terms at a glance

  

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Private Equity

So-called buyout investments are made in mature and cash flow generating companies. The acquisition is usually made with the use of financial leverage. Private equity typically forms the core of a private market portfolio and tends to carry higher risks but offers higher potential returns.

  

A hand icon represents the term private credit

Private Credit

Private credit involves lending money to private companies. These loans can take various forms, such as senior loans, mezzanine loans or subordinated loans. Private credit investments tend to have a lower risk and return profile and typically have limited upside and downside potential. Returns on private credit investments are distributed to investors over the life of the investment.

  

A factory icon represents the term venture capital

Venture Capital

Venture capital provides funding to early to late -stage start-ups and companies in exchange for an equity interest in the company. Of all the common private markets strategies, venture capital offers the highest risk and return potential. This is often associated with high volatility.

  

  

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Private markets: Three building blocks for a strong portfolio

For a long time, investing directly in private markets was a privilege reserved exclusively for professional and institutional investors. Now, private investors can also tap into this growing segment by investing indirectly through fund solutions. This offers investors new opportunities to optimize their portfolios.

Read more

  

 

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To find out more about the criteria for the availability of the offer, contact our experts.

  

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