I’ve been reading a lot of books on finance lately. Most of them are either too simple or way too complicated for anyone who doesn’t have a PhD in math. But I found one that actually makes sense. It’s called “Introduction to Private Equity, Debt and Real Assets” by Cyril Demaria.
Cyril Demaria started this book because he couldn’t find anything good to read about private equity. Most of what was out there just didn’t make sense. It didn’t match what actually happens in the real world.
The words “private equity” get thrown around a lot. But people use them in different ways, and it gets really confusing.
One of the biggest problems with private companies is that they don’t have to tell you anything. In the stock market, companies have to share their financial reports all the time. But in the private world, there’s no law saying they have to.
I already talked about why private companies are so secretive. But there’s a whole industry built on trying to find their secrets anyway.
Because it’s so hard to get good data on private equity, people start taking shortcuts. And those shortcuts lead to some big mistakes.
If you think venture capital is a modern invention from Silicon Valley, think again. It’s actually hundreds of years old. In fact, Cyril Demaria argues that Christopher Columbus was one of the first great venture capitalists.
We saw how Christopher Columbus was basically a 15th-century startup founder. But for private equity to become a real industry, something big had to change. We needed a shift from “kings and queens” to “partners and contracts.”
We’ve talked about history, but let’s get into the real engine of private equity: the entrepreneur.
Cyril Demaria makes one thing very clear: without entrepreneurs, private equity has no reason to exist. The entrepreneur is the one who takes a bunch of separate pieces—time, money, ideas—and turns them into something way bigger than the sum of its parts.
We usually think of the USA as the birthplace of modern finance. But when it comes to venture capital, the story has a very French twist.
Here’s a fun fact: you’re probably already an investor in private markets.
Even if you’ve never heard of a “General Partner,” if you have a pension fund or an insurance policy, your money is likely being funneled into private companies. Big institutions like banks and pension funds take the premiums we pay and invest them in non-listed companies to get better returns.
If you ever invest in a private equity fund, don’t panic when you look at your statement after the first year. It’s probably going to show that you’ve lost money. This is what we call the J-Curve.
Private equity isn’t just one thing. It’s a whole universe that follows a company from its very first day until it’s a giant corporation.
Most people think of private equity as just owning a piece of a company. But the “private markets” universe is much bigger than that. It also includes two other major categories: Private Debt and Private Real Assets.
If you’ve ever bought a house, you know it’s a long, stressful process. You have to get an inspection, talk to the bank, and negotiate with the seller. Now imagine doing that for a multi-million dollar company.
For a long time, private equity was a small, quiet industry that stayed below the radar. But those days are over. Today, it’s a global powerhouse, and that change is bringing some big questions.
We’ve reached the end of our retelling of Cyril Demaria’s “Introduction to Private Equity, Debt and Real Assets.” It’s been quite a journey—from Christopher Columbus to multi-billion dollar mega-funds.