Private Equity: Democratization in Progress

Private Equity: Democratization in Progress

Long reserved for professional investors, private equity is increasingly opening up to retail clients. Focus on the democratization of Private Equity with Michel Ivanovsky, President and co-founder of Mipise.

The return of volatility and inflation coupled with an excess of liquidity to invest is encouraging savers looking for performance to take an interest in unlisted investments, including private equity.

Spearheading innovation financing, French private equity is gaining strength with a record collection in 2021 of 11.6 billion euros across 784 transactions, according to EY's annual report.Private equity is supported by a particular macroeconomic situation marked by a return of inflation and volatility in financial markets in an increasingly uncertain geopolitical context.

The search for diversification and performance

The enthusiasm for private equity has several origins. To turn the page on the health crisis, the member countries of the European Union sealed a historic agreement on a joint recovery plan named NextGenerationEU which allows for the massive injection of liquidity into European economies. The goal: to build a more resilient, greener, and more digital economy by adapting it to current and future challenges. The private equity sector fully benefits from the ultra-accommodative monetary policies of central banks that flood the markets with liquidity.

In response to government and corporate bonds becoming less attractive due to low rates, investors are turning to non-traditional finance by placing their capital in riskier unlisted vehicles with greater return prospects. Over the last decade, the net yield of private equity funds was 10% compared to 7% for the CAC 40. The global economic and geopolitical context marked by the Russo-Ukrainian conflict, tensions over the supply of fossil fuels, and the return of inflation should favor investment in unlisted securities in the coming months by directing capital towards small and medium-sized actors close to the real economy.

Tech attracts capital

The appetite of management companies for the tech sector with its many startups is unwavering. The year 2021 is even historic in more than one way.** French Tech achieved record fundraising of 11.2 billion euros, and the ecosystem saw the emergence of no less than 12 new unicorns**. Among these, the fintech sector shows strong dynamism.

Ledger, Lydia, and PayFit are some of the unicorns in finance. Regulatory pressure on the banking sector and the lack of agility of banking institutions that rely on a pyramidal organization of their teams create opportunities for new entrants. Finance startups enable the banking sector to take the digital turn by developing B2C solutions, particularly around mobile payments, like Lydia, whose payment solution combined with a viral marketing strategy is popular among younger generations.

Fintechs stand out, and French tech develops gems in other sectors as well. The health crisis highlighted the company Doctolib in the healthcare sector. This French flagship of medical appointment booking is also valued at more than one billion euros. More broadly, the biotech, agrotech, renewable energy, and internet services sectors, with companies like Manomano or BackMarket, attract investors in the growth equity segment, whose assets have doubled between 2016 and 2021.

Simplified acces to Private Equity

Investing in innovative companies has long been reserved for professional investors with a high entry ticket of 100,000 euros. Times have changed. Private equity is opening up to small savers with the launch of suitable vehicles thanks to custom risk management. Entry tickets are more affordable between 2,000 and 5,000 euros.

Michel Ivanovsky
President, Co-founder of Mipise

The democratization of private equity is partly carried by aggregation platforms. They make the connection between small investors and professionals by developing intermediate funds open to individuals who invest in private equity funds.

The digitalization of private equity also converges with crowfunding platforms. Fundraising for capital investment on these platforms doubled in 2021 to reach 102 million euros, according to Mazars' barometer. The challenge for the sector will be to continue its opening to a wider audience to fully respond to its role in financing the real economy.

Mipise supports the digital transformation of management companies

As a leading white-label solution for regulated financial intermediaries (CIF/CIP/IFP/PSI etc.) and Fin-Tech in the fields of crowdfunding and crowdsourcing, MIPISE supports the digital transformation of portfolio management companies by providing them with a 100% online, customizable, and modular platform that adapts to their business specificities.

Our financial digitalization offer is developed to meet the main concerns of management companies engaged in the digital transformation of their activities :

  • Automate, industrialize, simplify tasks and processes
  • Create new business usages
  • Adapt to new client profiles
  • Reduce the number of intermediaries
  • Reclaim client knowledge for better commercial efficiency
  • Collect, manage, secure, and trace client and user data
  • Dematerialize and manage documents
  • Optimize margins without impacting service quality
  • Modernize its image and increase its notoriety

The MIPISE team is composed of specialists from the banking and financial world and the internet world. Asset Management Companies (SGP) thus benefit from a dual expertise:

  • Expertise in auditing and consulting to analyze varied and complex financial processes
  • Expertise in web development and Blockchain technology

If you want to: Directly distribute financial products? Distribute loans via a franchisor network? Issue and manage assets using Blockchain technology? Redesign management processes through the creation of a dedicated website?The white-label solution developed by Mipise addresses many use cases and will allow you to digitize your processes at a controlled cost. Let's discuss your project !