The "Lac d'Argent" fund has been set up to protect listed French start-ups from hostile takeovers. The fund, to be launched in April and managed by the state-owned bank Bpifrance, will be "totally private".
Bringing stability to French companies
Announced on January 30, the Lac d'Argent fund aims to invest 10 billion euros in around 15 listed companies with a significant French base. The public bank aims to support undercapitalized French listed groups as they face new challenges, including growing pressure from hedge funds, and the management of major digital and ecological transitions.
The scheme is intended to strengthen France's arsenal for safeguarding these nuggets against the rise of activist funds. Nicolas Dufourcq, CEO of Bpifrance, believes that in the future, the Lac d'Argent fund " will be ideally positioned to deploy capital in promising sectors and achieve exceptional returns, while contributing to the dynamism of the French economy ".
Mubadala and Bpifrance strengthen their partnership
For several months, Bpifrance has been trying to convince investors around the world to participate in this fundraising. On February 24, 2020, Mubadala, Abu Dhabi's sovereign wealth fund with assets worth 229 billion euros, announced that it would participate to the tune of 1 billion euros. In 2017, Mubadala joined forces with Bpifrance to develop a platform with an investment capacity of 1 billion euros.
This program, which was designed to complement the Franco-Emirati fund launched by Mubadala in 2014 to support more mature French SMEs and ETIs, resulted in investments initiated by CDC International Capital (absorbed by Bpifrance in 2018). The success of this alliance led the two players to strengthen their collaboration through the creation of the Lac d'Argent fund.
This contribution will be supplemented by 1 billion euros from French insurers, 1 billion euros in equity from Bpifrance and 1 billion euros in debt. As a result, the public investment bank has already secured 4 billion euros.
Redirecting a portion of French savings to SMEs
Bpifrance will soon be offering an investment designed for French people wishing to invest in listed companies. This announcement is in response to a request from the French Minister of the Economy and Finance to redirect a portion of French savings towards SMEs. Indeed, in 2018, the presidential majority, which intends to double the proportion of savings contributing to the financing of these companies, had called for the mobilization of financial sector professionals along these lines.
French investors will have access to the Bpifrance portfolio. The product will be backed by 2,500 of the 3,000 underlying companies in which the public investment bank already holds shares. The minimum share value will be " a few thousand euros ", according to Nicolas Dufourcq.