The private equity , or private equity, is an asset class that has demonstrated exceptional return potential. In France, the average annual rate of return for private equity has reached 14% over the last ten years, far surpassing the performance of the CAC 40, which is capped at around 6.5% per year. This remarkable performance is attracting more and more individual investors, particularly thanks to the democratization of access via specialized platforms like Ona Invest.
Table of Contents
- What is private equity and unlisted investment?
- Why invest in private equity?
- Is private equity accessible to everyone?
- How to invest in private equity?
- Conclusion
What is private equity and unlisted investment?
Unlisted investment includes several forms of investment in companies that are not listed on the stock exchange. Unlike stocks that can be easily bought through a traditional securities account, these companies are not accessible on traditional financial markets.
Unlisted companies are often SMEs or high-growth startups that prefer to remain private for several reasons:
- Maintain control over the company
- Avoid the high costs associated with an IPO
- Protect their strategies and finances from outside scrutiny
These innovative companies are looking for investors willing to commit to the long term to support their development. Unlisted equity is not limited to start-ups: it also includes more mature companies that need capital to finance their expansion, acquire competitors, or restructure their business. This is what is known as private equity.
We distinguish in particular:
- Venture capital : investment in start-ups in the seed or acceleration phase.
- Private equity : investment in established, often profitable, companies wishing to develop outside of financial markets.
- Private debt : direct loans granted to these companies, offering an alternative to bank financing and attractive returns.
Why invest in private equity?
1. The potential for return
Private equity is recognized for its performance, often superior to that of public markets. By investing in high-growth companies, you have the opportunity to benefit from spectacular valuation. For example, investing in a start-up that becomes a leader in its sector can generate very significant financial gains for the investor.
However, this type of investment involves risks. Unlisted shares or bonds are less liquid, meaning you cannot quickly resell your shares if you need cash. You must therefore be prepared to tie up your capital for several years.
2. Diversification
Investing in unlisted assets allows you to diversify your portfolio beyond stocks, real estate, or government bonds. You are betting on innovative companies, sometimes in niche sectors, with disruptive business models. This diversification can offer protection against the volatility of public markets.
3. Meaningful investment
Investing in unlisted companies often means supporting passionate founders who are committed to projects with a strong societal and environmental impact. For example, at Ona Invest, we support French SMEs rooted in the local economy, in areas such as technology, health, sustainable development, or social entrepreneurship.
Bonus: tax advantages
In France, several tax schemes encourage investment in unlisted SMEs, such as the Madelin law , the scheme IR PME , the JEI ( Young Innovative Company ) or the JEIR ( Young Innovative Company Research ). These schemes allow you to benefit from tax reductions ranging from 18% to 50% of the invested capital, which further increases the attractiveness of these investments.
Is private equity accessible to everyone?
Long reserved for institutional investors and large fortunes, private equity is now opening up to individuals thanks to specialized platforms like Ona Invest. It is possible to start investing with entry tickets starting from $1,000, which considerably democratizes access to this type of investment.
This democratization relies on the strength of a community of investors who come together to jointly finance ambitious projects. On Ona Invest, for example, fundraising rounds ranging from $300,000 to $5 million are carried out, allowing everyone to have a significant say in the negotiation and support of companies.
It is important to emphasize that private equity is a medium to long-term investment. If you need immediate liquidity, this type of investment is probably not suitable.
How to invest in private equity?
1. Choose the right platform
To access unlisted investment opportunities, it is essential to select a reliable platform that rigorously vets projects. At Ona Invest, each company is evaluated based on its business model, growth potential, and impact. This meticulous selection is the first guarantee for the investor.
2. Diversify your investments
As with any investment involving risks, it is advisable not to put all your eggs in one basket. Invest in several projects, sectors, maturity stages, and geographical areas to spread the risks and maximize your chances of success.
3. Monitor your investments
Unlisted equity often offers a more direct relationship with the companies in which you invest. You can follow their progress, receive regular reports, and sometimes interact with the founders. If you do not wish to handle this monitoring yourself, you can entrust this task to a professional management team, such as Ona Invest's, which optimizes exits to maximize capital gains.
4. Consider taxation
It is important to be well-informed about the tax arrangements applicable to your investment, as they can significantly improve the final profitability. Do not hesitate to seek advice from a wealth management expert or an Ona Invest advisor to optimize your strategy.
Conclusion
Private equity is a unique opportunity to diversify your assets, aim for potentially high returns, and support innovative and meaningful companies. Thanks to democratization through platforms like Ona Invest, this investment is no longer reserved for an elite but is accessible to a wide audience.
However, keep in mind that this is a long-term commitment, with an element of risk and lower liquidity. But beyond financial profitability, investing in unlisted companies also means becoming a stakeholder in the success of businesses that contribute to transforming our economy and society.
For those who wish to delve deeper into the subject, there are numerous resources and platforms that facilitate access to this exciting and promising market. Do not hesitate to inform yourself and surround yourself with experts to succeed in your entry into private equity.