Private Market Investing, Not Just Stocks

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*. Experts believe that this is likely to multiply over the next few years.

*McKinsey Global Private Markets Review 2023.

The three main reasons for Private Equity

1. Returns potential

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

2. Attractive investment opportunities

Private market investments offer investors access to investment opportunities not available on the public markets. Evergreen private market investments make this possible even without a fixed term.

3. Enhanced diversification

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

Learn how you as an investor can participate in the development of Private Markets.

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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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Evergreen private market investments – more flexibility

Traditionally, private market investments have been associated with long-term, illiquid investments with high minimum investment requirements. Evergreen products offer the opportunity to invest in the private market without fixed maturities and at regular intervals, providing flexibility in terms of investment duration. This can make them attractive to investors with a medium-term to long-term investment horizon. In addition, the minimum investment amounts are lower and subscription can be made directly via an ISIN number. This product flexibility allows investors to tailor their private market investment to their own investment horizon and more easily align it with their investment strategy.

What sets Evergreen products apart?

Lower minimum investment amount

Direct access to an existing private markets portfolio

Flexible purchase or sale of units and easy subscription process

Liquidity Imbalance

Cash position has a slightly dampening effect on expected return

Investors must rely on fund managers to correctly value assets

Essential terms at a glance

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.

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.

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 – Setting off into a new investment universe