Private equity is often associated with high leverage. Many funds rely on aggressive debt structures to magnify returns, but this approach leaves companies vulnerable when market conditions shift. At Pareto at Work, we take a different path. Our financing strategy is deliberately conservative – because we believe that long-term value creation requires resilience, not fragility.
We acquire only profitable, cash-flow positive companies. This ensures that every acquisition strengthens the group from day one. By applying moderate leverage and maintaining a solid equity base, we protect both the acquired companies and our investors. In practice, this means Pareto’s platform can withstand economic downturns, regulatory changes, or shifts in demand without jeopardising stability.
This conservative approach creates three major advantages for investors:
- Downside protection: lower leverage means lower financial risk and stronger resilience against market cycles.
- Flexibility: when others are constrained by debt, Pareto has the capacity to seize attractive acquisition opportunities.
- Trustworthy returns: steady interest payments through our convertible loan structure, combined with equity upside at exit, create a balanced risk-return profile.
The result is an investment that combines security with significant upside. Our target horizon of 5–7 years is designed to deliver a 2.5–3.0x Multiple on Invested Capital (MOIC) and an Internal Rate of Return (IRR) of ~18–20%. For investors, this means attractive returns without the hidden risks of over-leveraged structures.
At Pareto, we view conservative financing not as a limitation, but as a strength. It is the foundation upon which we build trust with investors, support entrepreneurs, and create a platform that can weather storms and still deliver extraordinary value.