Well-functioning exits play a key role in channelling capital towards European companies. In response to the European Commission’s consultation on private equity exits, Euronext outlines how improving liquidity, broadening investor participation, and strengthening the links between private and public markets can reinforce Europe’s capital markets ecosystem and enhance its competitiveness.
Improving exit conditions to support investment and growth
Euronext believes that efficient exit opportunities are key for a healthy investment cycle. When investors can realise returns in a predictable manner and at scale, they are more inclined to deploy capital into new ventures and to support companies throughout their growth journey.
Initial public offerings (IPOs) remain the central pillar of this ecosystem, providing companies with access to deep and diversified pools of capital while offering investors full liquidity and transparent price formation. Ensuring that IPO markets remain attractive and accessible is therefore critical to sustaining a strong exit environment in Europe.
On the other hand, in many cases, non-IPO exit routes remain fragmented and characterised by low liquidity. This fragmentation can limit the flow of private capital into the real economy. Strengthening exit pathways that are complementary to IPOs can therefore play an important role in facilitating access to additional funding for European companies, particularly innovative firms and those in the scaling phase.
The role of a private markets platform
In this context, the potential creation of a pan-European regulatory framework for a private markets platform may warrant further consideration as part of the broader private-to-public financing continuum. While such platforms could offer certain advantages, their overall impact would depend on design choices, regulatory approach and market uptake. Potential areas of contribution could include:
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facilitating more structured liquidity opportunities for private companies;
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supporting improved transparency and price formation;
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enabling access to a broader pool of investors;
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helping to reduce reliance on fragmented, bilateral transactions in certain segments;
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providing an additional tool to support the preparation of companies in their transition towards public markets.
At the same time, it is critical that such a platform operate as a complement to – and not a substitute for – public markets. Deep and liquid public markets remain essential for long-term financing, offering unmatched levels of transparency, investor participation and price discovery.
A private markets platform should therefore function as a stepping stone towards public listing, helping companies professionalise, increase visibility and prepare for the transition to public markets. Preserving this complementary relationship is key to avoiding liquidity fragmentation.
Designing a proportionate and effective regulatory framework
In considering the regulatory strategy for a private markets platform, Euronext favours a pragmatic and balanced approach, fostering innovation while safeguarding market integrity and investor protection. Relevant principles should include:
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proportionality: regulatory requirements should reflect the specific characteristics of private markets, avoiding unnecessary burdens;
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harmonisation: a coherent EU-wide framework is essential in order to reduce fragmentation and enable cross-border participation;
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controlled experimentation: a regulatory sandbox could allow new models to be tested in a safe and efficient manner;
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use of trusted infrastructures: leveraging established market operators to help build scale, trust and investor confidence.
A carefully calibrated framework for a private markets platform has the potential to contribute to mobilising capital and, more broadly, to further strengthen Europe’s capital markets ecosystem.
For more information, visit the European Commission’s consultation page.