Private equity a hit with individuals

Source : L'AGEFI
Author : Aroun Benhaddou 

French private equity players and infrastructure funds continue to benefit from investors' enthusiasm for the asset class. According to the 35th edition of France Invest's survey of private equity activity, fundraising reached €18.4 billion in the first six months of the year. This historically high level is due in particular to the importance of private equity processes, which alone totalled 10 billion euros. Players in this segment (which excludes infrastructure) amassed 35% more than in the first half of 2020, but more importantly a quarter more than in the first six months of 2019.

"This trend is felt on a daily basis, and these consolidated figures serve as confirmation. All our businesses are growing, starting with development and innovation capital. Buyout capital, on the other hand, remains relatively stable due to its greater maturity," emphasizes Claire Chabrier, President of France Invest and Associate Director of Amundi Private Equity Funds.

Another noteworthy fact is that the 10 billion euros raised by private equity players are mainly attributable to funds between 100 and 500 million euros. No funds over €1 billion were added to the total. "Alexis Dupont, Managing Director of France Invest, comments : "Growth funds raised significant amounts, which naturally contributed to the good activity in the first half of the year. Insurers, however, despite being partners in the Tibi initiative, played only a small part in the good level of activity in the first few months of the year. Their commitments were down by a third compared with the first half of 2020.

Rising barriers

By contrast, funds of funds increased their allocations to the asset class by 184%. This historic leap is essentially due to the enthusiasm of less sophisticated investors for private equity. In the same vein, a wave of private investors is beginning to irrigate the non-listed industry. For the first time in history, their commitments (1.66 billion euros), up by almost 60% in the first six months of the year, exceeded those of insurance companies.

"This trend underscores the attractiveness of our asset class. All our efforts over the past few years are beginning to bear fruit," explains Claire Chabrier. Over the next five years, we expect to increase their contribution to nearly 10 billion euros a year.

To achieve this ambitious goal, the association has set up a working group which is attempting to remove three barriers. The first is regulatory, and could be removed by making proposals to the public authorities to streamline existing life insurance and retirement savings mechanisms. The second relates to training. The association plans to set up training courses for private bankers and all distributors, to familiarize them with the asset class. Last but not least, a communications campaign will continue to raise the profile of private equity.