Gilles Vanhouwe, Director at Verlinvest, argues that European growth equity doesn't have a definition problem; it has a reputation problem. The hangover from 2021's late-stage mega-rounds has left the strategy tainted by inflated valuations, and many investors still keep their distance. His pitch is different: growth equity works when it pairs long-term capital — or, as he puts it, capital that's "impatient for a long time", with a simple thesis about consumer behavior: watch how younger generations spend their time and money, and move before that shift becomes obvious to everyone else.
Verlinvest doesn’t fit neatly into the usual categories of European private equity. It’s a family-backed consumer investor active across three geographies: India, Europe, and the US, structured, Vanhouwe says, with a flexibility that typical GP-LP setups don’t always allow.
That flexibility shows up in four verticals: consumer products, healthcare services (the “consumerization” of healthcare is, he says, a central thesis), consumer tech, and what the firm calls “lifestyle” businesses, entertainment and physical retail concepts. It’s a deliberately broad definition of consumer, because, Vanhouwe argues, almost every product or service ends up in a consumer’s hands one way or another.
Where Venture, Growth, and Buyout Split
Vanhouwe draws the line in terms of risk. Venture capital underwrites technology and product-market-fit risk. Growth equity steps in once that commercial risk is largely de-risked, leaving execution risk, product extension, channel extension, or, Verlinvest’s favorite, international expansion. It’s a level of risk-taking that traditional buyout funds, he says, tend to avoid.
On AI, he’s direct: no deal reaches investment committee today without an assessment of its exposure to AI disruption. But he notes that consumer businesses, especially ones built on offline intimacy with the customer, are, in his view, less exposed than a pure B2B software player. Inside the portfolio, AI gets applied mostly to internal processes: automating back-office functions and consumer-facing interactions.
Demographics as a Leading Indicator
The most repeated thesis in the conversation is simple: “demographics are destiny.” Verlinvest watches how younger generations spend their time and money as a leading indicator of where growth will sit. That’s driven investments in purpose-led brands like Tony’s Chocolonely, in pet care — fueled by younger generations treating pets like children, and in categories like beauty, aesthetics, and multi-site entertainment. Vanhouwe is careful to add that this kind of observation demands humility: the real risk is mistaking a fad for a structural shift in habits.
Why Growth Equity Hasn’t Taken Off in Europe
This is where Vanhouwe breaks from the optimistic narrative. Growth equity, he argues, is already a defined asset class in Europe, it’s just not a popular one. Part of the problem is reputational: the post-COVID association with inflated late-stage rounds pushed capital out of the space in a way he doesn’t think is justified.
For Verlinvest, growth equity rests on three elements: genuine partnership with existing shareholders, a shared obsession with growth, typically expansion beyond the domestic market, and strengthening the company’s balance sheet, often combining a buyout of existing shares with fresh capital to fund growth.
Long-Term Capital, Not Patient Capital
The final distinction is semantic but deliberate. Vanhouwe avoids the word “patient” because, he says, it implies complacency. He prefers “long-term”: the real inflection points at companies like Oatly or Tony’s Chocolonely have come after the five-year holding mark, with growth accelerating in years six, seven, and eight, and liquidity conversations only starting ten or even fifteen years after the initial investment.
His conclusion isn’t that Europe has solved growth equity. It’s that building real European champions requires a capital structure willing to sustain that bet longer than the market, so far, has been willing to tolerate.
