Private equity investments are stakes in businesses that are not traded on public equity markets. It includes venture capital, growth equity and buy-outs. These types of investments offer investors a larger universe of investment opportunities and the potential for better returns.
Private equity investments are particularly attractive in today’s markets. Initiatives to build better companies, aided by management team expertise, digitalization, and efficiency gains/cost management, could result in higher profitability. Opportunities arising from secular and cyclical shifts and technological disruption are creating new business models. The disposal of non-core assets, could create attractive merger and acquisition opportunities.
Venture capital
Minority equity investments to help companies launch, develop, or expand initial operations.
Growth equity
Minority equity investments to help companies grow quickly by expanding operations or entering new markets.
Buyouts
Majority equity investments in companies to gain control of mature firms and operating cash flows.
Private equity markets tend to be more inefficient than public equity markets, particularly for small to medium organizations. Private equity firms can take advantage of the mispricing and potentially earn higher returns.
99% of medium sized organizations are not traded on listed equity markets and only 3% are owned by private equity firms1. Private business therefore represent a significant opportunity for investors.
A lack of liquidity vs. public markets has an upside for investors in the form of an illiquidity premium. Those who deploy capital to private equity may potentially earn higher returns as a result.
We have 16 years of experience and USD 59 billion of private equity assets under advisement1. Talk to us to see how we could help you.
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Important legal information for investors
1 Source: PitchBook, Bloomberg, National Center for the Middle Market.
2 As of June 30, 2021.
About Mercer’s assets under management and advisement figures
The assets under advisement data (AUA Data) reported here include aggregated assets under advisement for Mercer Investments L LC and their affiliated companies globally (Mercer). The AUA Data have been derived from a variety of sources, including, but not limited to, third-party custodians or investment managers, regulatory filings, and client self-reported data. Mercer has not independently verified the AUA Data. Where available, the AUA Data are provided as of the date indicated (the Reporting Date). To the extent information was not available as of the Reporting Date; information from a date closest in time to the Reporting Date, which may be of a date more or less recent in time than the Reporting Date, was included in the AUA Data. The AUA Data include assets of clients that have engaged Mercer to provide ongoing advice, clients that have engaged Mercer to provide project-based services at any time within the 12-month period ending on the Reporting Date, as well as assets of clients that subscribe to Mercer’s Manager Research database delivered through the MercerInsight® platform as of the Reporting Date.
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