Growth Equity ft. John Coelho

In this episode of RPM, we’re talking about growth equity with partner John Coelho.

• However you define “growth,” its champions regard it as a proverbial Goldilocks that offers VC upside with buyout-type risk (1:01).
• After analyzing 25,000+ private equity deals in SPI, we found that growth delivered a higher multiple than VC and lower loss rates than buyouts (11:05). This was especially true of investments in the software sector, which for several years has been the fastest growing and best performing sector in private equity.
• Since growth equity companies tend to be profitable and less reliant upon leverage, we find them to be particularly attractive during periods of market uncertainty (13:21).

Because growth contains parts of both buyouts and VC, and it is in a strong position to benefit from technological tailwinds, it should be an important part of any well rounded private equity portfolio.