How We Balance Risk and Reward in Private Equity
By Ago Abel
Private equity sounds exciting when you hear about it from afar. Bold investments. Big exits. Fast growth. But when you’re in the middle of it—especially in emerging markets like Benin and across Africa—the story isn’t quite so glamorous. It’s slower. More uncertain. And, at times, deeply personal.
At LELEADER GROUP, we’ve learned to see private equity not as a gamble but as a long-term relationship. One that requires patience, trust, and a tolerance for discomfort. Because while the upside is real, the risk isn’t abstract—it lives in the details.
Let me explain.
When we evaluate a potential investment, we’re not just looking at spreadsheets. Of course, the numbers matter—cash flow, margins, debt load. But so does everything else: the personality of the founder, the unspoken tensions in the team, the supply chain fragility no one mentions in the pitch. Those “soft” things? They’re usually the ones that come back to bite—or to reward—you later.
One case comes to mind.
A few years ago, we met a small manufacturing company producing eco-friendly packaging. The margins were tight. Their processes were scrappy, but the founder was clearly onto something. The market need was there. So were the early orders. But their books were messy, and they didn’t have much of a digital backbone.
A traditional investor might’ve walked away. Too risky. Too unpolished. But we didn’t. We saw value beyond the balance sheet. We structured our support carefully—partial equity, some convertible debt, and operational involvement. It wasn’t smooth sailing. At one point, they almost lost a key client due to production delays. But they pulled through. Today, they’re supplying to regional chains and looking at expansion beyond Benin.
That’s the kind of reward you can’t quantify on day one. It takes time to surface.
Still, we don’t romanticize risk. We’ve seen ventures fail, too. Even with effort. Even with goodwill. Sometimes it’s due to policy shifts, sometimes due to unforeseen shocks—like a pandemic, or an investor pulling out. And sometimes, honestly, it’s just poor execution. You can plan all you want, but business doesn’t always cooperate.
So how do we balance it?
First, we diversify. Not just across industries, but across stages of growth. Some of our portfolio companies are still in their early hustle phase—figuring out their market fit, juggling multiple roles. Others are more mature, with steady contracts and repeat clients. Spreading our bets helps reduce exposure to any one sector’s volatility.
Second, we stay close. Passive investing doesn’t work well in environments where unpredictability is baked in. We roll up our sleeves. Join strategy calls. Help fix sourcing issues. In some cases, we even step in temporarily to support a missing function—like accounting or logistics.
It’s hands-on. Sometimes too hands-on. But in these markets, capital alone isn’t enough. Founders need support. And context. And someone who won’t disappear when the first fire breaks out.
Third, we remain flexible. That might sound vague, but it’s crucial. We’ve adjusted repayment schedules midstream. We’ve restructured deals to allow for reinvestment instead of early returns. We’ve postponed board decisions because the founder was dealing with family issues. These things don’t show up in financial models. But they shape the outcome, more often than you’d think.
Of course, not everyone appreciates this approach. Some peers say we’re “too close” to our investments. That we should keep more distance. Maybe they’re right—in some cases. But for us, it’s a matter of values. If we’re in, we’re in.
And as we look ahead, we’re not just thinking about returns. We’re thinking about ecosystem building. What role can our investments play in strengthening local supply chains? In creating jobs? In fostering resilience in overlooked sectors?
That broader lens is part of what we’ll be taking with us to London this November, where LELEADER GROUP is proud to be a nominee at the 2025 Go Global Awards, hosted by the International Trade Council. It’s an event that brings together companies from around the world—each navigating risk in their own context, each shaping their industries in some way.
It’s not just an awards show. It’s a space for new conversations. For rethinking how we define value. For asking whether growth has to come at the cost of stability, or whether we can have both—if we build it right.
And maybe that’s the real heart of our approach to private equity: we invest in possibility. Not blindly. Not recklessly. But with clear eyes and open hands. And a willingness to walk alongside people doing the hard work of building, often without a safety net.
That’s risky. But it’s also where the magic tends to live.