How the HEC Paris-Antin Certificate Transformed Students’ Perspectives on the Modern Private Equity Landscape

Discover how the HEC Paris-Antin 'Private Equity and Infrastructure' Certificate reshaped the views of students Christina and Carl, exploring the sector’s potential for long-term value creation, innovation, and societal impact.

The HEC Paris-Antin IP 'Private Equity and Infrastructure Certificate' offered Masters and MBA students a unique opportunity to explore the evolving world of private equity through a mix of lectures, practical applications, testimonials and discussions with top industry leaders.

In this interview, two students, Christina Helene Hounisen an MSc in Sustainability & Social Innovation student and Carl Philipp Claussen an MSc in Managerial and Financial Economics, share their reflections on the program, exploring how their perceptions of private equity evolved and how they see its potential to drive both profit and positive change. From the quest for purpose in their career choices to finding a balance between impact and profit, their reflections offer a glimpse into the future of private equity through the eyes of the next generation of financial leaders.

After this 6-week certificate, do you consider private equity to be "good or evil", as Oliver Gottschalg, the certificate's academic director, put it in his final lecture?
 

Christina: Good. Compared to listed companies that are under constant public scrutiny and subject to changing political and economic agendas and investor sentiment - not necessarily reflecting their actual performance and contribution to societal value creation, PE can deliver long-term value in the real economy by building solid business models and innovating.

I realized that the somewhat traditional image of private equity firms ruthlessly cutting jobs to create value is outdated

Carl: I believe that private equity is neither inherently good nor evil. However, during the certificate, I realized that the somewhat traditional image of private equity firms ruthlessly cutting jobs to create value is outdated. Modern private equity firms focus on growing businesses responsibly, by using expertise and capital. Through great discussions with industry professionals, such as Alain Rauscher (Co-Founder and CEO of Antin), Sachin Khajuria (Former Partner at Apollo), and Stephen Marquardt (CEO of Blue Earth Capital), it became clear to me that today's private equity managers prioritize long-term value creation that ultimately benefit both PE Funds and their portfolio companies.

Do you see any contradiction between embracing a career in PE and building a career around purpose and positive impact?

Christina As a MSc in Sustainability & Social Innovation, I’m of course critical to entering a sector where achieving the highest IRR (Internal Rate of Return) is the main objective, but however, I do not see this as solely ‘bad’ with regards to having positive impact. I believe the sustainability “movement” must be able to speak the language of investors and exhibit an attractive business case to bring about the necessary changes and sustain in the long-term.

Compared to public markets, I believe that a career in PE can be aligned with my purpose to address grand societal challenges like climate change as PE shops are trusted with pension funds and sovereign wealth fonds’ money which ultimately belongs to the people. Hence, the longer-term investment horizon that PE is able to take on is much more aligned with sustainable value creation compared to the short-term view, pushed by quarterly reporting, that dominates publicly listed companies.

 
How has your knowledge and perception of the private equity sector changed over the certificate? What did you learn during this certificate?

Christina: Initially, I perceived PE as a profit-focused sector with little creativity to transform businesses via organic growth. This has changed during the certificate, and I’ve seen how PE firms are leveraging unique sector insights and strong experience to come up with original and innovative business models at portfolio companies.  Of course, the numbers need to be solid to achieve the high rates of return that are notorious for the PE sector (and which can justify the high management fees) - and yes, the speakers did talk a lot about profit, growing the EBITDA-multiple, and 20% IRR targets... However, I have come to appreciate the complex strategic thinking that takes place through-out the entire PE investment cycle.

Transforming a portfolio company through various value creation levers demands robust business acumen, strategic foresight, and an entrepreneurial spirit. This understanding has reshaped my view of the PE sector as not only profit-driven but also capable of substantial business innovation.

 I believe the sustainability “movement” must be able to speak the language of investors

When Sachin Khajuria said it would take time to transform private equity from an activity sometimes seen as economic plunder to a force for good, do you think it's up to your generation to put finance and private equity at the service of the common good, or is it a more systemic problem?

Christina: I believe this is a systemic problem and will be as long as progress is measured in money terms like GDP growth. Capitalism is integral to the way societies run today and if we are to transform PE into a force for good, that requires a whole new lens through which we view society, relying equally on social, environmental, and economic metrics to determine progress.

Despite these systemic challenges, I am more optimistic today as a European citizen witnessing the recent adoption (April 2024) of the EU’s Corporate Sustainability Due Diligence Directive (CSDDD), which mandates comprehensive measures for climate change mitigation and human rights assessments across the corporate value chain of larger European and non-European companies operating in the EU . The directive requires companies to align corporate activities with the Paris Agreement's 1.5°C target, publishing 5-year action plans up until 2050, but also emphasizes the importance of social responsibility alongside environmental sustainability. I hope a regulation like this will encourage investors to equally prioritize the social aspect within ESG considerations and that the investment community will use the CSDDD as a steering wheel to make more sustainable investments.

Hence, PE’s financial power can become a force for societal good, directing private capital towards sectors and business that are addressing the challenges facing communities today.

In his lecture, Sachin explained that private equity was a people-driven business, requiring a specific mindset. Does this resonate with you? Does it match your perception of the industry and the profession?

Carl: Sachin highlighted in his lecture the people-driven nature of private equity. This definitely resonated with me, as it echoed insights shared throughout the certificate. Mélanie Biessy, COO of Antin, emphasized the importance of partnership and discipline within investment teams. Charles-Édouard Bouée, former CEO of Roland Berger, stressed that the exceptional teams that he was/is part of, were a key driver in successfully raising three PE funds. All these perspectives have reshaped my view of the industry, showing me private equity as a field where relationships, strategic thinking and collaboration are vital.

The focus on people with an ownership mindset fits perfectly with the modern approach to creating value in a responsible and sustainable way.

All these perspectives have reshaped my view of the industry, showing me private equity as a field where relationships, strategic thinking and collaboration are vital.

Do you think that criteria such as social impact, climate, diversity or employee well-being can be decisive in private equity investment strategies, or that short-term profits still prevail?

Carl: When I think about the ESG side of PE investing, one session in the certificate immediately comes to mind. In one of the last sessions of the certificate, we sat in the bar of the Best Western next to the HEC campus and had a great fireside chat about impact investing with Stephen Marquardt. Stephen is currently CEO of Blue Earth Capital, an impact investment firm with 1.2 billion AUM. Next to general discussions on the role of PE in society and the misconception of impact investing as philanthropy, he told us about specific projects that Blue Earth has invested in, such as Thyme Group. Thyme Group is a South African company that promotes financial inclusion by providing bank accounts to low-income consumers and business owners. But what I took away from the session was the idea that investors do not have to sacrifice return to have impact, or as Stephen said, "It's about return AND impact".

However, it is not only in impact funds that ESG can add value. For example, a case study, we worked on with Alex Kesseler (Partner at Antin), showed us that employee retention can be a key driver of a company’s growth. Putting together all the perspectives on ESG throughout the certificate, I think the days of short-sided profiteering in private equity are over. Modern PE strives to create value for all stakeholders, including investors, employees and communities.  

What I took away from the session was the idea that investors do not have to sacrifice return to have impact

What did you take from the speech by Alain Rausher, CEO of Antin?

Carl: The session we had with Alain Rauscher, Co-founder and CEO of Antin, was great. He talked about his personal and professional journey and how Antin IP came to be. What really stood out for me during the discussion was the way in which the lessons that Alain shared with us, are reflected in the four founding principles of Antin: Partnership, Entrepreneurship, Discipline and Accountability.

Another thing that stuck with me was Alain's advice to be "aggressively patient." According to Alain, being aggressively patient means being ambitious in your career without forgetting that careers are long and that it takes time and discipline to build something worthwhile. What I really liked about this concept is that it perfectly captures the ideas and advice of the industry leaders we met throughout the certificate.