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Why private equity?

Private equity offers access to non-public companies, emerging markets and innovative industries, providing opportunities for long-term growth. By investing across various stages of a company’s lifecycle, investors can tailor their portfolios to capitalise on specific growth trends and unique market opportunities, potentially enhancing overall portfolio performance and achieving higher returns.

Why Franklin Templeton for private equity investing?

With a proven track record and an expansive reach across diverse markets, we bring a wealth of expertise and opportunities to our investors, navigating the complexities of the private equity landscape.

US$83 bn

Private equity assets under management

20+

Years investing in private equity

16

Global locations

Data as of 30/06/2025.

A range of opportunities across stages of development

Private equity offers a wide range of opportunities across different stages of a company’s development from early-stage to mature buyouts. By diversifying private equity investments across these stages, you can tailor your portfolio to capture specific growth trends and market dynamics. This approach may help manage risk while maximising the potential for high returns. 

Least mature 

Venture capital

Growth equity

Most mature

Buyout

Risk

Highest

Lowest

Stage 1

Venture capital

Represents investments in early-stage companies with an idea for a new product or service. Private equity firms are essential partners in turning innovative ideas into viable, high-growth businesses.

Acting in a mentorship capacity.

Utilising their network.

Taking board seats.

Assisting with technology development.

Stage 2

Growth equity

Focus on established companies with a proven business model that are fast-growing. Private equity firms provide capital, offering both financial resources and strategic guidance.

Executing strategic growth initiatives.

Making strategic acquisitions.

Taking board seats without taking control of company or having heavy involvement.

Stage 3

Buyout

Buyouts are the largest, most mature single strategy in all private markets and constitute a spectrum of transactions varying in leverage, size and strategies. The private equity firm plays a crucial and active role in acquiring and transforming established companies.

Leveraged Buyout (LBO)-Based on financial engineering

  • Portfolio companies with steady cash flows can support larger amounts of debt
  • Corporate tax advantages
  • Operational benefits

Equity Buyout-Generating higher potential profits from growth, expansion, or transformation.

  • Expanding distribution and product lines
  • Improving processes
  • Creating synergies with the PE fund’s other portfolio companies

The appeal of private equity

The appeal of private equity investing lies in its emphasis on strategic execution, enabling value creation through active management and operational improvements, while also offering access to significant capital resources for targeted investments, fostering growth and innovation within portfolio companies.

Strategy execution

Private equity firms excel at executing strategic plans that drive growth and profitability. By leveraging their expertise in operational improvements, market expansion and cost management, they can significantly enhance a company’s value. 

Value creation

Private equity firms focus on active management. This can include restructuring operations, optimising capital structures or making strategic acquisitions, all aimed at increasing the overall enterprise value.

Availability of capital

Private equity provides companies with substantial capital that might not be available through traditional financing channels. This capital injection supports growth initiatives, innovation and scaling, ultimately leading to higher potential returns for investors.

Private equity secondaries

Private equity secondaries are a rapidly growing segment of the broader private equity market and an important source of liquidity for investors. Investors in secondaries are purchasing primary interests from large institutional investors like pensions funds and foundations and endowments when they need liquidity for rebalancing or strategic initiatives, often at attractive pricing.

Growing Market

The secondaries market has grown more than 3x since 2016, and as primary commitments rise, there could be room for even more growth within the secondaries market.

Annual Secondary Market Volume ($B)

Growing market graph

Source: Jeffries Global Secondary Market Review. As of January 2025.

Mitigate the J-curve**

Unlike primary funds, secondary funds buy interests in funds that have mostly completed their investment periods, containing portfolio companies that are already generating cash flow.

As a result, secondary funds typically return investor capital sooner because they purchase stakes at later stages in the private equity lifecycle.

J-Curve graph

For illustration purposes only.

Ability to buy proven assets

By purchasing interests in private investment funds when most or all of their capital has been invested, secondary funds reduce the blind pool risk* associated with primary fund investing.

Assets graph

Why secondaries?

Private equity secondaries offer the investor access to the private equity market and may serve as a useful diversification tool to actively rebalance portfolios.  

Abstract graphic

Broad diversification

Diversified portfolios by sponsor, fund, sector, strategy, geography, industry, company and vintage year, which can potentially dampen volatility 

Abstract graphic

Potential for earlier cash returns

By acquiring interests in established private investment funds, secondary funds generally receive earlier and more frequent distributions than a traditional primary fund 

Abstract graphic

Reduced investment risk*

By purchasing interests in private investment funds when most or all of their capital has been invested, the blind pool risk associated with primary fund investing is reduced 

Abstract graphic

Mitigation of primary J-curve**

By purchasing assets closer to their harvest stage and at a discount, investors can mitigate the J-curve effect associated with primary fund investing 

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Our knowledge hub

Alternatives education by Franklin Templeton

The Franklin Templeton knowledge hub provides educational resources to help empower partners to navigate alternative investments. Explore our knowledge hub section to find out more about our experts’ latest thinking, unique opportunities, and an in-depth understanding of the alternatives market.

Explore our knowledge hub

Accessing private assets: Liquidity in an illiquid world

The first in our ‘Accessing Private Assets’ series aimed at providing transparency on private asset products, we explore how managers support the periodic liquidity (subscriptions and redemptions) available to investors in semi-liquid fund structures. 

Read now

The cost of being too liquid

Private markets have historically delivered an “illiquidity premium” which has been captured by many institutions in their asset allocation to alternatives. Learn more about the illiquidity premium and get some ideas about allocating to private markets. 

Read now

Unlocking opportunities: Understanding the growing secondary market

The global secondary market has grown over the past three decades primarily because of the increased supply of capital committed to private investment funds, according to Lexington Partners. They believe the backdrop for the secondary market continues to remain attractive.

Read now

Investment risks

Private equity investments involve a high degree of risk and are suitable only for investors who can afford to risk the loss of all or substantially all of such investment. Private equity investments and vehicles that invest in them should be considered illiquid and their performance may be volatile. There can be no assurance that any investment will be adequately compensated for risks taken.

*Blind pool risk is derived from investors in a new (“primary”) private equity vintage that are investing in a relatively blind pool of assets. Secondary investors help eliminate this by investing in identifiable assets.

**The “J-curve” is the term commonly used to describe the trajectory of a private equity fund’s cashflows and returns. An important liquidity implication of the J-curve is the need for investors to manage their own liquidity to ensure they can meet capital calls on the front-end of the J-curve.

Important information

Franklin Templeton Australia Limited (ABN76 004 835 849, AFSL 240827) is the Responsible Entity and/or investment manager of the products included in this website.

Information on this website is intended to be of general information only and does not constitute investment or financial product advice. It expresses no views as to the suitability of the products or services described as to the individual circumstances, objectives, financial situation, or needs of any investor. You should conduct your own investigation or consult a financial adviser before making any decision to invest. Please read the relevant Product Disclosure Statements (PDSs), and any associated reference documents before making an investment decision. Neither Franklin Templeton Australia, nor any other company within the Franklin Templeton group guarantees the performance of any Fund, nor do they provide any guarantee in respect of the repayment of your capital.

In accordance with the Design and Distribution Obligations, we maintain Target Market Determinations (TMD) for each of our Funds. All documents can be found via the Literature Page or by calling 1800 673 776.

Past performance is not an indicator nor a guarantee of future performance. Any prediction, projection or forecast on the economy, stock market, bond market or the economic trends of the markets is not necessarily indicative of the future or likely performance. All investments involve risks, including possible loss of principal.

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