Listed Private Equity: Bridging Both Worlds

For decades, private equity has carried an aura of exclusivity. The term conjures up images of complex deals, multi-year lockups and outsized returns open only to large institutional investors and billionaires. But in fact, private equity has long been accessible to all investors through publicly traded private equity managers and funds that bridge public and private markets.

At its core, listed private equity is a simple idea: private equity companies and funds that are themselves listed on stock exchanges, while holding underlying companies and assets that remain in private hands. This means that any investor — from a pension fund to a retail saver — can buy exposure to private equity investment by buying shares in a listed company.

Private equity’s appeal has rested on its potential for outsized returns, driven by active management and long-term strategic investment. But in its traditional form it also carries a drawback: inaccessibility. Traditional private equity funds typically have a lifespan of 10 to 12 years, require high minimum commitments (often millions of euros) and restrict liquidity until the assets are all sold and the fund winds down.

A gateway to private markets

Alternatively, listed private equity companies offer flexibility. They come in several forms. Some are listed firms themselves, some are funds of funds that invest in a range of private equity vehicles, others are direct investment funds that hold ownership stakes in private companies. Some focus on specific strategies such as venture capital, buyouts or infrastructure.

But they all provide public market investors with convenient access to these privately held assets. This is important as, increasingly, the action is in private markets. Globally, the number of publicly listed companies is declining, while the number of companies choosing to remain private, particularly in the early stages of growth, has soared. Arguably, more innovation, employment, and value creation now happens in privately held companies than in publicly listed ones.

Liquidity meets longevity

The bridge that listed private equity provides is not just about accessibility — it’s also about flexibility. Traditional private equity funds lock up capital for long periods to pursue long-term value creation.

By trading on exchanges, listed private equity shares can be bought or sold at any time, giving investors the freedom to adjust exposure without waiting a decade for capital to be returned. Yet beneath that liquidity lies a portfolio of long-term, privately held assets whose valuations move more gradually and reflect underlying business fundamentals rather than market noise.
Liquidity on the surface, while the underlying assets remain illiquid.

Democratising private markets

Democratisation is a theme sweeping through finance. Regulators, asset managers and investors alike are exploring ways to open alternative assets to a broader audience. Listed private equity has emerged as a good way for small, less sophisticated investors to do this with the protection, in terms of reporting, governance and disclosure standards required for a listed company.

In addition, listed private equity offers exposure not just to a single fund vintage but to a continually evolving portfolio. Listed private equity vehicles are in effect “evergreen” — they recycle profits from exits into new investments, maintaining continuous exposure to private markets. This structure helps smooth returns over time and avoids the cyclical “J-curve” pattern of traditional private equity.

As private markets continue to grow, this bridge between the private and public spheres will only become more significant. That’s why Invest Europe’s Listed Private Capital Roundtable (LPCR) with its 26 members has worked diligently over the last two years to educate key stakeholders and increase the visibility of the listed private equity segment. Examples of this include the listed private equity valuation report, the Citywire roundtable I participated in earlier this year, as well as the leader interviews with several LPCR Members.

Listed private equity doesn’t just connect two markets, it connects two investment philosophies: the patience of private capital with the accessibility of public markets. The best of both worlds.

Pierre Bernardin is Managing Director - Head of Investor Relations at Eurazeo, listed on Euronext Paris, and a member of Invest Europe’s Listed Private Capital Roundtable.