FINANCING PRIVATE EQUITY
BACKING EXCEPTIONAL ENTREPRENEURS AND MANAGERS
As a long-standing investor in venture & private equity, BONART has extensive relationships with many leading entrepreneurs and investors globally.
We draw on these relationships to generate a broad funnel of opportunities, and we are often among the first co-investors contacted for attractive co-investment opportunities.
“Our focus is on creating real value through active ownership in a manner that is collaborative and synergetic with the 'business' founders and management team.”
New Perspective on Private Markets Developments
Before the emergence of the mature public markets we see before us today, there were only private markets. Without entrepreneurs and early-stage investors taking risks and building companies (and countries) literally from scratch, we would have no investment banks, no stock market indices, no Bloomberg, and no Robinhood.
The distinction between public and private markets is a hangover from the days when only institutions could access private markets in a meaningful way. Now, individuals can enjoy the rewards (and, of course, the risks) of investing in private ventures. Naturally, private, and public markets are not mutually exclusive. They can grow together, and they are.
In the 20th Century, public markets exploded in size, and the narrative focused on large, liquid companies captured the attention of bankers and investors. Practitioners and policymakers assumed that progress means “go public". Private markets were an old hat; fragmented, inefficient, risky and a throwback to less enlightened times, characterised by small-minded entrepreneurialism. IPOs, M&A, and trading income dominated bank earnings. The awkward complexities of private equity, debt, and real estate were not on Wall Street's radar.
How things changed. Between 2000 and 2018, the number of private equity-backed companies in the US rose from less than 2,000 to nearly 8,000. In contrast, publicly listed companies in this period fell from 7,000 to about 4,000 (although listed firms are still worth more than ten times the private-equity-backed ones). For those on the front lines, the shift in sentiment towards private markets is becoming tangible.
Alternatives in the private markets have tended to offer better returns than public equity in the past decade. Over the last 30 years, US buyouts have generated average net returns of 13.1%, compared 8.1% for an alternative private-market performance benchmark. Yes, buyouts attracted all the headlines, but the growth of venture investing has been impressive too.
Heavyweight institutional investors like investing in private markets for the same reason they have always liked – they provide alpha at scale. Superabundance is real, and pension funds, endowments, SWFs, and the likes needed to deploy capital somewhere – and private markets are willing beneficiaries. Headline-grabbing performance has attracted investment flows, which have, in turn, fostered the maturation of the industry – more players, more indices, more service providers.
Our Focus on Private Markets Investments
We nurture relationships with entrepreneurs and invest when the time is right for their business. When we invest, we invest for the long term. We are patient.
Having been on both sides of the fence, we understand the fine line between an investor's help or hindrance. We love working with our companies but focus on the most important issues without getting in the way of day-to-day management. Our network is at our entrepreneurs' disposal to help refine products, develop strategic partnerships, enter new markets, and add more potential investors, customers, and advisors.
While we are always open to any interesting idea, technology is at the forefront of the deals that capture our interest. That is not to say that we will not look at deals that fall outside of these parameters – we are always open to consider interesting opportunities.
Insights
The differentiation factors:
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Allocating investors with Web Intelligence capabilities
Bonart concluded a unique partnership with alternative data experts that track millions of websites, companies, and investors worldwide, helping us identify opportunities with potential investors in specific sectors. We design and implement quantitative data strategies for the data-driven investment funds and corporates. By covering a wide variety of data points, we can stay informed of all aspects of the private market, early movers, and capital allocation resources.
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Strategic Fundraising for Private Companies (Equity and Debt)
We believe that open dialogue on raising capital is more critical today than ever, especially for potential investors in different geographies and different ways of thinking.
We have taken up the challenge of raising funds from global investors on countless occasions and have been successful. At BONART, we are continually striving to optimize our processes and adapt them to existing market conditions to spread our client's message and generate incoming inquiries.
Ultimately, the success in convincing investors depends on the sales approach and professionalism of our team. Our experience in dealing with global investors is something we are pleased to pass on: Conviction, USP - the strengths of the company or fund, and a personal touch.
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The Next Level in Financial Products Distribution
We offer access to multiple target markets and investors across all major asset classes using a multi-channel distribution approach.
The four most crucial aspects of successful distribution in financial services, also defined as fundraising or "growing assets under management," are:
Clarity of product. Access to investors. The simplicity of purchase. True wealth creation.
These are also areas in the investment industry, where innovation is lagging. As distribution models continue to grow in complexity, working with a strategic partner becomes increasingly necessary. With expert knowledge and access to an aggregation of all global leading fundraising solutions, the right partner gives you a considerable edge.