The French can now become co-investors alongside Bpifrance in the capital of unlisted SMEs and start-ups. The public investment bank has set up the "Bpifrance Entreprises 1" fund, which is open to private investors. For full details.
Putting French people's savings to work financing SMEs
According to figures published by INSEE, the household savings rate has reached 27. 4%, up from 14.9% in 2019. However, these sums are not benefiting the French economy at a time when companies need to strengthen their equity capital.
Several governments have already tried to use French savings to finance SMEs, without success. This time, Bpifrance seems to have found the solution with the creation of the "Bpifrance Entreprises 1" fund, opening the way to private equity for individuals.
What are the features of the fund launched by Bpifrance?
Nearly 1,500 small and medium-sized companies and startups, most of them French, are included in the "Bpifrance Entreprises 1" fund, with an entry ticket of 5,000 euros. The public investment bank points out that this isa risky investment, as the capital is not guaranteed.
The investment fund is closed for 5 years, which means that once invested, it is no longer possible to get your money back during this period. The duration is 6 years, extendable by one year.
Target: 95 million euros of investment over 12 months of subscription
Bpifrance hopes to attract 95 million euros of investment over a 12-month subscription period, and generate a return of between 5 and 7% for investors. The aim is to free up equity capital for SMEs, especially in times of crisis. " It's a form of economic patriotism: you're helping SMEs to develop locally," asserted Bruno Le Maire on LCI. On this occasion, the Minister of the Economy and Finance repeated the promise he had already made to the French: there will be no tax increase, and savings, which have been accumulating for several months, will not be taxed.
Not everyone is convinced by the solution proposed by Bpifrance. Indeed, some specialists point out that there is no shortage of investment products, such as the Fonds commun de placement dans l'innovation (FCPI) and the Fonds d'investissement de proximité (FIP). However, the problem may lie elsewhere, namely in the fact that banks have gradually turned away from corporate financing in favor of real estate lending and speculative market activities. A recent study by Kantar for BNP Paribas Cardif confirms this: private equity ranks last among the products in which asset managers would like to strengthen their portfolios. Whether or not the new fund will convince French households remains to be seen.