French private equity investments rebounded sharply during the first half of 2014 in terms of total value as well as the number of companies supported, according to statistics released by the AFIC and Grant Thornton.
Some EUR3.6bn was invested (+39 per cent / H1 2013) in 895 companies (+17 per cent / H1 2013, +8 per cent / average for 2006-2013). More than half of total amounts invested were devoted to new companies (EUR1.9bn). Eighty five per cent of companies receiving investments are headquartered in France (EUR2.9bn).
Growth capital registered very strong growth and reached a historic high for the number of companies supported (528) and its second-highest score in terms of amounts raised (EUR1bn).
This half-year, companies supported by venture capital received larger amounts of financing. Investments of EUR5m to EUR30m rose sharply compared with first-half 2013.
During first-half 2014, EUR3.6bn in capital was raised by French private equity players, a stable level compared with first-half 2013. Some 43 per cent of funds were raised from foreign investors. This proportion rises to 66 per cent for funding greater than EUR200m.
Nearly half of funds raised from foreign investors (47 per cent) came from funds of funds.
Michel Chabanel, president of AFIC, says: “French private equity continues to provide active and expanding support to French companies. During first-half 2014, the records set in terms of number of companies supported and of amounts invested in growth capital, as well as the increase in average amounts invested by venture capital, are very positive indicators. So too is the contribution of foreign investors to capital raised, in particular for the largest capital amounts, a sign of the continued attraction of French private equity which offers one of the best performances worldwide.”
The divestment market achieved a dual record in first-half 2014, with 563 divestments, for a total of EUR3.6bn at historical value.
This trend was driven by a doubling in volume of buyout capital (EUR2.4bn / EUR1.2bn H1 2013), and by transactions greater than EUR100m (EUR1.8bn / EUR0.7bn H1 2013). This is the consequence of a very strong rise in divestment amounts in favour of industrials (102 divestments for EUR1.2bn / 98 divestments for EUR0.4bn in H1 2013).
Thierry Dartus, partner, director of the transaction advisory services department at Grant Thornton, says: “In a macroeconomic environment that remains complex, private equity is withstanding. Underlying business conditions remain fragile, with transactions that drag out over time in particular given uncertainties in current trading. The rise in activity observed this half-year must not erase the difficulties that remain, in particular in fundraising. French private equity continues to demonstrate its dynamism, agility and ability to support growth projects by investing in almost 900 companies, with investment values per unit rising sharply for both venture and development capital. The divestment market remained strongly active thanks to industrial players whose divestment volumes at historical costs have more than tripled. We must hope that this pic in activity continues in the second half-year, which appears to be the case since the summer break.”
