Inside Private Equity: A CEO's unfiltered take
June 24, 2026
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10 min
Hello, I am Eric Deram, managing partner and founder, CEO of Flexstone Partners, and today I'm hoping to take you behind the private equity scene.
What is the best advice you received regarding your role as a CEO?
Probably the best advice I ever heard from the CEO of a Fortune 500 business a long time ago was that a CEO only has three jobs. One: set the direction, two: set the tone, and three: choose the people. And this is how I conduct or try to conduct my business today.
In your opinion, what makes a successful private equity manager and what makes a bad one?
So the successful PE managers, in my experience, are the people who are truly passionate about helping companies grow. Because private equity is all about that, helping companies grow, right? A bad one would be a pure financial type. There's so much more to value creation than pure financing.
How did you start your career in private equity and what made you choose that path?
Well, I started my career in private equity from the debt side. I was working at what is called today private debt. I was sourcing, underwriting and syndicating senior loans for leveraged buyout transactions initially from Paris then New York. It is really a bit of a cliché, but I always wanted to work in private equity or PE as we call it today. This stems from my father who was a development banker. He used to take me and my siblings on visits of projects that he had help finance, whether there were factories, shops, farms, etc. It demonstrated to me very early on the importance of equity financing for privately owned companies as well as strong alignment of interest between the entrepreneurs, the employees, the bankers, and the investors. It also showed to me how much this was important for the growth of the economy in general.
When did you start your own company? How did you do it?
So, I started my company in January 2005 in Geneva, although I had been working on the idea for more than a year before that. I started with an ex-colleague of mine and a business angel. We collectively invested about a hundred thousand Swiss francs to set up the company and provide for working capital. Euro PE, which was the name of my first company, was entirely bootstrapped.
Is there anything you would've done differently in your career?
Probably many things, but I really say that Flexstone Partners only has two assets, our team and our reputation. So PE is fundamentally a people business. It is important to have the right team in terms of culture, ambition, and skills. I made a few hiring mistakes. This is probably the only thing I would do very differently today. Being a bit more careful in choosing team members.
Since you started your career, what are the main changes you've seen in the private equity landscape?
The market today is totally different from what it was when I started 30 years ago. I would say that the market has become significantly more efficient. Competition has increased, processes are more institutionalised, and both investors and managers have become much more sophisticated. It is also vastly bigger. A good example is the impressive growth of the secondary market. The demand for secondaries has surged over the last few years reaching an all time high in 2025 with 226 billion of transaction volumes compared to only 61 billion in 2020 just five years ago. An additional evolution would be the increased sophistication of fund managers as well as investors with significantly more product offerings such as “evergreen”, semi-liquid private equity funds.
What were the most important market events of your career and the ones you think have redefined the private equity game?
There were many. A few major events really stand out and shaped how private equity operates today.
I think first, early in my career, the Dot Com bubble was a defining moment. There was huge excitement and speculation around technology companies, and in many ways it echoes what we see today with artificial intelligence, and we saw that bubble actually burst shortly thereafter.
Then came the Global Financial Crisis, followed by the European sovereign debt crisis. They fundamentally changed attitudes toward leverage, liquidity, and risk management, both for fund managers as well as investors. For instance, with the sharp decline in leveraged buyouts and falling valuation, the emphasis shifted from financial engineering to creating value through active management. This is why I mentioned earlier that it’s so important to be so passionate about helping companies grow.
Finally, more recently, COVID was another big turning point similar to the Global Financial Crisis. Deal activity slowed down significantly due to significant uncertainty and market volatility. This prompted structural shifts focusing on sectors that were better positioned to navigate those challenging conditions. The pandemic truly tested the resilience of companies, accelerated operational changes and digitalisation, and highlighted the critical need for robust business models.
What is the thing you are the most excited about in the private equity market today?
There are many things that excite me about the PE market. The first one, I think the most important one, is that we are only scratching the surface, and PE should continue to grow double digit over the medium term. The second one is innovation, of course, in terms of new products, application of AI, etc. The third one would be the growth of the secondary market. This is a very exciting opportunity as well as collateralised fund obligations, so-called CFOs. And finally, of course, the retailisation of private assets. If done properly, it will be beneficial to all stakeholders, retail investors, fund managers, privately owned companies, and therefore ultimately the economy as a whole.
What is the one thing that worry you the most in the private equity market today?
Although not specific about private equity, the one thing that keeps me awake at night is the very high level of uncertainties in the world. Whether that’s geopolitical, inflation, state of the economy, etc. It is very difficult to underwrite long-term business models with a lot of uncertainty.
What do you see as most likely to happen in the private equity market, say, in the next 10 years?
I see three very strong trends. The first one is: consolidation of fund managers will certainly continue. The second one would be a very significant increase of the size of the secondary market, and keep in mind that even though it has grown substantially over the last few years, it remains really small compared to the size of the primary market. Finally, the convergence between liquids and illiquids, I think will become more and more prevalent. Investors will start to move away from this binary view of the world of investments to focus on potential risk and returns of each underlying assets. In other words, an investor will look at equity for what it is, a share of the future profits of a company with the associated risks. Regardless of whether that piece of equity, so to speak, is publicly traded or privately owned.
If you had three things to say to people willing to invest in private equity, what would you tell them?
There is one thing that I keep repeating, which I think is really important: the world is private. Private equity is about providing financing to the 80%+ of companies in the world that are not listed on any stock exchange. It is vital for the economy. The second thing is about market timing. It is nearly impossible in private equity. Commitments are drawn over several years, and performance depends much more on the vintage diversification and long-term exposure than on trying to enter at the perfect moment. Finally, private equity is primarily a manager-driven asset class. Partnering with seasoned managers who have demonstrated success through different market conditions, applying effective value creation strategies, disciplined investment strategy, and strong governance is essential for generating and maintaining long-term returns.
I hope sharing my experience is helpful. Thank you very much for your attention.