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Investing in the "Bpifrance Entreprises 1" fund: good or bad idea?

Published on October 15, 2020 - 2 mins reading time
Bank watch
Called "Bpifrance Entreprises 1", the fund has been open to taxpayers since October 1, 2020. It offers the opportunity to invest in over 1,500 companies from the portfolios of Bpifrance's partner private equity funds.

What is the "Bpifrance Entreprises 1" fund?

BE1 was approved by the Autorité des marchés financiers (AMF) on September 1, 2020, and is managed by the public investment bank Bpifrance. Like the FIP and FCPI funds, it is a venture capital mutual fund (FCPR) for investing in non-listed companies.

By purchasing shares in the BE1 fund, individuals invest their money in over 1,500 SMEs, mostly French and unlisted, in a variety of sectors including digital technologies, healthcare, finance and consumer goods. More specifically, "Bpifrance Entreprises 1" comprises 45 funds managed by some 80 French companies. Bpifrance set it up by housing 5% of these funds invested between 2005 and 2016.

Investing in the BE1 fund: advantages and disadvantages

French people who invest in the fund created by Bpifrance can benefit from a number of advantages. Firstly, they help to support the local economic fabric in their own way, and keep jobs in France. Secondly, thanks to this fund, savers can enter a highly diversified portfolio that has already been invested for a long time, thereby reducing risk-taking. Last but not least, there are no front-end fees when investing via the 123 IM platform. The maximum average annual management fee is 3.42%, including 1.04% for the distributor. However, an additional fee of 2% of the subscription will be charged from April 1, 2021. As for yield, the net annual performance target should be between 5% and 7%, net of fees and taxes, which is " quite reasonable " according to the experts.

The private equity fund launched by the public investment bank does not have only advantages. Capital is not guaranteed, which means that investors cannot be sure of recovering their initial investment. Moreover, liquidity is not guaranteed. This financial investment has a 6-year lifespan, extendable by one year. The money paid in cannot be used during this period.

How can I invest in the "Bpifrance Entreprises 1" fund?

To buy shares in the Bpifrance fund, simply visit the secure 123-im.com digital platform. Subscription is just a few clicks away, thanks to a fully digitized process. Fund units can then be held in a securities account, a PEA account or via a life insurance policy.