French private equity participants raised global assets of EUR8.1 billion in H1 2017, up 30 per cent year-on-year, according to figures released by The French private equity association – Association Française des Investisseurs pour la Croissance (AFIC), and Grant Thornton.
These funds will be largely invested over the next five years to fund the transformation of French and European companies.
A significant rise is noted in venture capital (x3.4 / H1 2016) and growth capital (x2.2 / H1 2016) investment intentions.
Funds raised from French investors increased over the period to EUR5.4 billion from EUR3.2 billion in H1 2016 and now represent 67 per cent of total funds raised. French funds came from the public sector (23 per cent), insurance companies (20 per cent), individuals and family offices (19 per cent) and corporates (9 per cent). Funds raised outside France totaled EUR2.7 billion and primarily came from funds of funds (38 per cent) and pension funds (21 per cent). To be noticed that globally corporates have tripled their financing for unlisted companies on H1 2016.
French private equity firms invested EUR6.4 billion in H1 2017 to support and accelerate companies engaged in growth projects. This fifth consecutive year of H1 growth represented a year-on-year increase of 16 per cent.
Olivier Millet, the Chairman of AFIC, says: “French private equity activity in the first-half of 2017 confirms the excellent 2016 figures. Funds raised, the number of companies funded and market liquidity through successful exits continue to trend-up, despite the French presidential and legislative elections during the period, which generally encourage investors to “wait and see”. Measures announced by the French government should create a favourable environment for funnelling considerably more savings into financing start-ups, SMEs and mid-caps. They should enable companies to open up their capital more extensively to fund their transformation and ultimately create more mid-caps. The growth trajectory in recent years of the French private equity sector has not only brought within reach the objective of a two-fold increase in annual fundraising to EUR20 billion by 2020, but has also positioned it to become Europe’s leading market.”
An analysis of investment tickets highlights the role of private equity in financing not only start-ups and small SMEs (around 1,000 companies received EUR1 billion, for an average ticket of EUR1 million) but also large SMEs and mid-caps (approximately 200 companies received EUR5.4 billion, for an average ticket of EUR27 million).
In H1 2017, 820 companies prepared or completed changes in their ownership structure, a half-year record, confirming the strengthened liquidity of this asset class. The exit market was buoyant among corporates and private equity firms.
Thierry Dartus, Partner and Head of the Transaction Advisory Services Department at Grant Thornton says: “The first-half of 2017 confirms once again the positive trends observed since 2014 across all activity segments, with fundraising up over 30 per cent to EUR8.1 billion and the increased presence of French investors. Additionally, the number of companies funded and the number of exits posted record highs, bolstering liquidity in the unlisted market.
“These good results reflect a favourable economic environment, marked by the ability of funds to identify companies and management teams that can accompany their growth strategy. The recent presidential election and initial measures taken by the new government to support the economy should help sustain the momentum of the opening months of the year and continue to create value.”
