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Summary of our market study
The private equity sector in France has seen significant growth, with fundraising increasing from €2.1 billion in 2016 to €11.5 billion in 2021.
By 2023, €31.2 billion had been invested in 2,800 companies and infrastructure projects, and some 1,440 divestments completed.
This growth is due to favorable factors such as low interest rates and abundant liquidity.
The sector is largely concentrated in the Paris region, which dominates with over 80% of fundraising activity nationwide.
Sectors such as healthcare and digital have become increasingly popular among investors
an analysis of sector preferences shows a strong bias towards the healthcare and digital sectors.
Some French private equity players
- Ardian, a Paris-based global investment company with a reputation for diversified investment strategies
- BPI France, a public investment bank, is uniquely positioned to bridge the gap between government financial support and private-sector dynamism. The institution plays an essential role in the development and growth of French companies
- Eurazeo is another major candidate, with its multi-faceted approach ranging from venture capital to growth and buyout activities.
- Tikehau Capital has made its mark by focusing on alternative asset management and investment
- Meridiam focuses on the development of public and community infrastructures
- Andréa and Infravia are also notable investors in the private equity landscape
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Summary and extracts
1 Market overview
1.1 Definition and scope of study
The French private equity sector is made up of a wide variety of players, including financial institutions, independent fund managers and family offices. The sector is structured around different investment segments: innovation capital, which supports young, innovative companies; development capital, which supports the growth of mature companies; growth capital, aimed at accelerating the expansion of established companies; and the development of new companies. accelerate the expansion of established companies; and transfer capital, used for company buyouts, often in succession situations. The private equity market is largely dominated by financial institutions: banks, pension funds and sovereign wealth funds, which will account for 75% of private equity fundraising in 2023.
On a global scale, private equity continues to grow, with assets under management reaching new records. In France, independent players such as PAI Partners stand out for their sector expertise, targeting leading companies in the food, consumer goods and healthcare sectors. Meanwhile, groups like Meridiam focus on sustainable infrastructure, a strategic field with high added value. Nevertheless, some giants, such asArdian (€150 billion in assets under management) and Eurazeo (€35 billion), are adopting a geoneralist positioning, responding to the varied needs of investors while increasingly integrating ESG criteria into their investment strategies.
The recent cut in key interest rates on October 17, 2024 has breathed new life into the private equity market, after several years of caution. Indeed, after a marked slowdown since March 2022 due to rising interest rates, players in the sector are now benefiting from more favorable financing conditions. For example, in 2023, the value of leveraged buy-out (LBO) transactions gradually picked up, representing 23% of assets under management in the first half of the year, an improvement on the 2022 figures, although far from the 44% average observed between 2011 and 2021. This renewed activity is reflected in increasingly aggressive financing, with investors benefiting from enhanced leverage, particularly in attractive sectors such as healthcare and technology, where valuations remain solid despite economic uncertainty.
The secondary market, meanwhile, is experiencing sustained growth due to increased demand for liquidity. In 2021-2022, on average, 52% of transactions were secondary (shareholder selling a share to another investor), rising to 62% in 2023. This trend is fuelled by investors' need to diversify and rebalance their portfolios while enjoying attractive returns. Younger assets (three to five years old) are gaining in popularity, offering bargain-basement opportunities for investors seeking medium-term returns. Finally, ESG (environmental, social and governance) factors are becoming crucial for investors, who no longer see them simply as risk management tools, but as levers for value creation. Many funds are moving towards strict ESG indicators, integrating these criteria to meet expectations of transparency and sustainable commitment, now an essential aspect of private equity asset valuation.
1.2 A growing global market
Global private equity market size World, ****-****, in $ billions Source: ****
The global private equity market is growing rapidly and is expected to reach approximately $*,*** billion by ****, with a compound annual growth rate (***) of *.**% between **** and ****. In ****, its value was estimated at USD ***.** billion, with a forecast of USD ***.** billion in ****. This ...
1.3 A declining national market
Investments in the private equity sector are a good indicator of market trends.
Investment amounts France, ****-****, € billion Source: ****
The private equity market has seen a sharp rise since ****: This is largely due to a lenient regulatory framework towards it. The **** Macron law facilitates the transfer of French savings to this ...
2 Demand analysis
2.1 Company start-ups drive the private equity sector
Investing in companies is investing in the real economy, and the main determinant of investment in the real economy is the real economy itself. If the economy is doing well, cash is flowing, investors have confidence and are putting their money into a wide variety of projects affecting the economy, including ...
2.2 Business failures are an obstacle to private equity investment
Company failures are also a key indicator in private equity, as they send a signal to future investors as to whether their investment is worthwhile: if company failures are numerous and increasing from year to year, this means that a private-equity investment may fall through (***). This indicator therefore acts as a ...
2.3 Monetary policy as a determinant of private equity
Trends in key ECB interest rates Europe, ****-****, in Source: ****
The relationship between monetary policy and investment is one of the central themes of macroeconomic analysis, particularly when it comes to studying the impact of interest rate variations on the real economy. The IS-LM model, introduced by Guy Laroque in ****, provides ...
2.4 Private equity's popularity depends on other asset classes
The popularity of private equity depends on other asset classes. An interesting indicator for understanding the potential of this unconventional asset class is its long-term average annual performance. For the time being, it outperforms all other asset classes over ** years.
Annual performance over ** years France, average over ****-****, in Source: ****
Private ...
2.5 Where do the French save?
To understand the investment trend in France, and therefore the possibilities for private equity financing, it's important to have an idea of what savings represent in France.
Gross savings are defined as disposable income minus consumption, unlike net savings, from which debt repayments are also subtracted.
Gross savings of French households France, ...
2.6 The French and private equity?
BPI France and France invest have released a barometer on private equity in ****. The sample is made up of *,*** people from CSP+, according to quota methods for age, gender, CSP and region. The results are as follows:
Key figures for private equity France, ****, in % of total Source: ****
Compared to ****, there has ...
3 Market structure
3.1 Value chain
Source: ****
Value chain:
Investors (***) is a French institutional investor that invests in private equity funds to support strategic national projects
Investment vehicle (***): This is the private equity fund itself. This vehicle is administered by a management company that makes investment and divestment decisions in companies. Example: Bpifrance entreprise avenir *: a venture ...
3.2 Characteristics of private equity fundraising
All the charts in Part * (***) deal with data excluding Infrastructure Funds.
Private equity capital raised, excluding infrastructure funds France, ****-****, in billions of euros Source: ****
Between **** and ****, the CAGR (***) is **%. Despite a slight decline in ****, the overall trend in capital raising is upward.
Despite this drop in the total value of ...
3.3 Private equity investments
Number of companies supported France, ****, in units Source: ****
Over the ****-**** period, the average annual growth rate is *%. Investments are gradually increasing.
In terms of the structure of these investments, a new trend can be observed:
Breakdown of amounts invested France, ****, in Source: ****
Emerging trend: primary transactions in **** are ** percentage points ...
3.4 Disposals down
In private equity, a divestment is the sale of a fund's stake in a company, enabling a return on investment to be realized. This operation is often the fruit of a medium- or long-term strategy in which the fund increases the value of the company before selling it at a capital ...
4 Offer analysis
4.1 Offer typology
The private equity sector is made up of a diverse range of players, all of whom are involved at different stages of a company's development, with specific investment strategies. The main players include business angels, venture capital firms, mutual funds (***) and corporate private equity funds.
Business angels are wealthy individuals, often ...
4.2 Managed management and Business Angels
There are many different ways to invest in private equity, and in this sub-section we'll look at two of them:
The first is managed via a platform: you register on the platform and gain access to private equity assets.
Among the best managed funds on the market, Ramify stood out at ...
4.3 Approved funds: FCPR, FCPI and FIP
Another option for investing in private equity is to use accredited funds.
The first of these are venture capital mutual funds (***). FCPRs are defined as vehicles for investing in the securities of unlisted companies, and their investment portfolios must comprise at least **% of unlisted companies.
Under certain conditions, FCPRs are tax-advantaged ...
4.4 Private equity funds, the Moonfare case
Investing in private equity with reputable management funds, such as those of Edmond de Rothschild, is an attractive option for wealthy investors, but access is often limited: entry tickets generally start at ***,*** euros, or even several million for the most prestigious funds. A typical investor needs to diversify across several funds, ...
4.5 Investing in private equity via life insurance
Investing in private equity via a life insurance policy is an accessible and flexible option for individuals seeking to diversify their investments. Unlike traditional private equity funds requiring high entry fees (***) offers access to renowned funds such as Ardian and Apax from as little as €*,***, enabling diversification at lower cost. The ...
4.6 Private-equity investment via trackers and the stock market
Investing in private equity via the shares of listed management companies and trackers (***) offers an attractive alternative for individual investors wishing to gain access to the performance of this sector, traditionally reserved for high net worth individuals. This method is based on the purchase ofshares in companies specializing in private equity, ...
5 Regulations
5.1 National regulations
PACTE (***):
The Pacte Law (***), adopted in ****, aims to facilitate the financing of French businesses by making greater use of individual savings. It includes schemes enabling savers to invest in private equity via life insurance products, in order to support the real economy. The law also introduces a simplified version of eurocroissance ...
5.2 European regulations
AIFM Directive (***):
Adopted in ****, this European directive provides a framework for the management of alternative funds, including private equity funds, and imposes transparency and risk management requirements. It aims to harmonize rules within the European Union for hedge funds and facilitate cross-border investments. [***]
UCITS Directive (***):
The UCITS Directive mainly regulates public ...
6 Positioning the players
6.1 Segmentation
[***]
6.2 Private Equity: State of Play and Outlook
Introduction:
Theprivate equity sectorhas been on a roll in recent years, reaching a record year in **** with **.* billion euros invested in the sector.
this is driven by a lenient regulatory framework (***). The ECB's monetary policy has also contributed to the expansion of this sector: very low interest rates from **** to **** enabled ...
- Raise invest
- BPI France
- Tikehau Capital
- CVC Capital Partners
- Infravia Capital
- Macquarie Capital Group
- Oaktree Capital Management
- Butler Capital Partners
List of charts presented in this market study
- French GDP in value
- Business start-ups in France
- French business insolvencies
- Annual performance over 10 years
- Key ECB interest rates
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Latest news
Private equity: CVC goes public with a bang - 29/04/2024
- - CVC manages assets worth 186 billion euros.
- - CVC's IPO market value is over 17 billion euros.
- - Swedish firm EQT's market value is 22 billion euros.
- - Carlyle's market capitalization is around $15 billion.
Ten years after its creation, Raise goes international - 04/03/2024
- Management company founded by Clara Gaymard and Gonzague de Blignières
- Raise management company celebrates its tenth anniversary.
- Opening of offices in London and Munich, in addition to the Paris office
- Raise currently manages €2 billion and over 55% of its business is carried out internationally.
- 70% of its mergers and acquisitions are carried out in Europe.
Tikehau Capital joins forces with Nikko AM to expand in Asia - 18/12/2023
- Economic growth and an aging population in Asia are creating an unprecedented volume of savings.
- By 2025, Hong Kong will surpass Switzerland in terms of wealth.
- Nikko AM is owned by SMTH, Sumitomo Mitsui Trust Holdings, one of Japan's largest banking groups.
- SMTH is Japan's leading asset management group, with $855 billion in assets.
- Tikehau Capital gained its first foothold in Asia in 2016 with the opening of an office in Singapore and through a partnership with sovereign wealth fund Temasek.
- Nikko AM is Japan's sixth-largest asset manager, with $219.2 billion in assets at June 30.
- Private asset specialist Tikehau Capital is considering a joint venture with Nikko AM for investment strategies in Asian private markets.
- Nikko AM plans to take a minority stake (less than 5%) in Tikehau Capital
- Nikko AM has expanded in Asia through acquisitions and joint ventures in Australia, Malaysia and China, and has offices in Hong Kong, New Zealand and Singapore.
Private equity: CVC postpones IPO to 2024 - 01/11/2023
- CVC postpones its IPO to 2024
- CVC manages a portfolio of 177 billion euros in assets.
- CVC's IPO was to have involved 10% of the manager, with a hoped-for valuation of between 10 and 15 billion euros
- CVC's investors include Singapore's sovereign wealth fund GIC, Hong Kong's central bank and Kuwait's sovereign wealth fund KIA.
- CVC recently acquired infrastructure manager DIF Capital Partners
- CVC raised a €26 billion fund in six months, the largest LBO fund ever raised in the history of the unlisted sector.
- Since coming to market in 2019, Sweden's EQT has risen by over 140%
CVC accelerates private equity consolidation - 06/09/2023
- CVC takes control of Dutch infrastructure manager DIF for 1 billion euros.
- DIF Capital Partners manages assets worth 16 billion euros.
- Prior to this acquisition, CVC managed 177 billion euros in assets.
- CVC also has a significant presence in credit, where it manages some 38 billion euros.
- CVC closed the largest fund in LBO history at 26 billion euros.
- Goldman Sachs and Morgan Stanley have been mandated for a potential CVC IPO.
Infrastructure expert Infravia enters the real estate market - 10/07/2023
- Investment fund Infravia has recently entered the real estate sector, despite market uncertainties.
- Infravia has announced the acquisition of Oreima, which holds real estate assets worth 2 billion euros. Oreima's next fund aims to raise 500 million euros.
- In 2018, Infravia managed €4 billion in assets and employed around 30 people.
- By 2024, Infravia plans to manage €20 billion in assets via four investment themes and employ 120 people.
- Assets under management in infrastructure should still account for around three-quarters of Infravia's investments next year.
- A new critical metals fund is due to be raised by the end of the year, with €2 billion under management.
- Oreima specializes in real estate investment and is present in office buildings in Paris
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