The Europa Clear Bank Private Equity Fund invests in private companies. The investments must increase the future growth and profit potential of companies in order to create value for the investors.
Private equity usually finances:
◩ The start-up of new companies (venture capital);
◩ The growth of a young company, through internationalization or takeovers for example (growth capital);
◩ Corporate spin-offs, for instance if a business unit no longer fits with the corporate strategy and/or the sitting management participates in this (buy-out);
◩ Privatization (taking private) or buying up of companies in order to be better able to realize an operational or financial restructuring (turnaround).
The private equity business model builds on strategic relationships with specialized private equity managers. Europa Clear Bank selects managers with a sound and convincing investment strategy and a proven track record of good results. Our funds consist of multiple sub-funds, each with their own vintage year.
The product lines within this are:
◩ Primary funds, secondary funds and co-investments
◩ Co-investments are invested directly in companies
◩ In the other cases we participate in private equity funds
In the past, Europa Clear Bank had the majority of its investments in private equity carried out and managed externally. Since 2013, Europa Clear Bank has had its own team for private equity investments.
Risk
Investing in private equity is investing for the long term. An APG Private Equity fund has a lifespan of ten to fifteen years. With private equity, there is risk involved in investing in venture capital and the restructuring of companies. The biggest risk, however, is in the choice of a private equity manager. The selection of the right capable managers is therefore a crucial part of the investment process. During the investment period, the fund manager monitors closely whether value creation is taking place on schedule and whether specific risks arise that pose a threat to the target return per fund.