Market view

Full lifecycle diversification with private equity

Unlike other asset classes, private equity enables investors to cover the entire lifecycle of a company or industry.

• Almost the only way for investors to get exposure to the launch phase of a company and its subsequent growth is through venture capital
• The financing of the mature phase of a company can be accessed by investing in public equity listed on stock markets or by investing in buyout funds, which acquire stakes in mature companies through buyout deals
• For companies in financial difficulties private equity is often the only source of financing to get back on the growth track. Distressed and turnaround investing, which started in the US, has been a growth area for European private equity managers in recent years, helping to revive struggling companies.

By allowing institutional investors to spread their investments over the full lifecycle of businesses, private equity provides an additional diversification element to their portfolios.