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Fundamentals of Private Equity
Large Investable Universe
Private Equity-Owned Companies Represent Over Two-Thirds of Companies1
Public markets do not cover the full investment universe. Private equity provides access and exposure to companies not available in public markets.
In 2000, 19% of U.S. companies were private | In 2024, 67% of U.S. companies are private
Portfolio Risk / Return Benefits
Private Equity can Improve a Portfolio's Risk / Return Profile2
An allocation to private equity can complement traditional portfolios and significantly improve the risk/return profile.
Portfolio Risk/Return Profile 25 Years Ended March 31, 2024
Value Creation on the Private Side Is Growing
Value Creation on the Private Side Is Growing3
Compared to 20+ years ago, companies are staying private longer. The implication is that much of a company’s growth is shifting to the private side; value creation is mostly earned by private owners, and less so for public shareholders.
Average IPO Market Cap ($mn)
Private Equity-Owned Companies Represent Over Two-Thirds of Companies1
Public markets do not cover the full investment universe. Private equity provides access and exposure to companies not available in public markets.
In 2000, 19% of U.S. companies were private | In 2024, 67% of U.S. companies are private
Private Equity can Improve a Portfolio's Risk / Return Profile2
An allocation to private equity can complement traditional portfolios and significantly improve the risk/return profile.
Portfolio Risk/Return Profile 25 Years Ended March 31, 2024
Value Creation on the Private Side Is Growing3
Compared to 20+ years ago, companies are staying private longer. The implication is that much of a company’s growth is shifting to the private side; value creation is mostly earned by private owners, and less so for public shareholders.
Average IPO Market Cap ($mn)
| Public Equity | Traditional Private Equity | Evergreen Private Equity | |
|---|---|---|---|
| PRICING | Daily market pricing | NAV published quarterly | NAV published monthly |
| INVESTMENT PACE | Invested immediately | Invested over time (i.e. ~3 – 4 years) | Invested immediately |
| REPORTING | Daily market pricing, regulated reporting | Quarterly reporting, not always regulated | Monthly reporting, regulated |
| LIQUIDITY | Daily liquidity | Illiquid. Generally 8+ year investment | Recurring opportunities for limited liquidity with periodic tender offers |
| VALUE CREATION | Generally passive | Active | Active |
| ABILITY TO CREATE VALUE | Low to none | High | High |
Buyouts Secondaries Roundtable: This is Not a Market Moment
- In a roundtable discussion conducted by Buyouts, Boriana Karastoyanova evaluates the continued demand for capital solutions in the secondaries market, as both GPs and LPs navigate a shifting market backdrop.
The Opportunities Across Private Equity’s Current Liquidity Landscape
- There are attractive opportunities for experienced liquidity providers in the current private equity market environment.
The Case for Co-investments
- Scarcity of co-investment capital could be creating a window of opportunity.
Private Equity: Unique Characteristics Mean Unique Opportunity
This module provides an educational overview of private equity investing, the advantages and risks of the asset class, how private equity funds are structured and the range of private equity strategies.
Upon completion this training qualifies for 50 minutes of Continuous Professional Development. Once fully completed we will email you a confirmation CPD certificate.
Deep Dive into Co-Investments
This module explores private equity co-investments, their distinctions from traditional private equity, reasons investors include co-investments in portfolios, and strategies for accessing them.
Upon completion this training qualifies for 60 minutes of Continuous Professional Development. Once fully completed we will email you a confirmation CPD certificate.