Investment and capital raising in France continued to increase in the first half of the year compared to the same period last year. However, inflows into infrastructure funds fell significantly over the period.
Will private equity suffer the same disaffection as the listed markets in 2022? Nothing really indicates this yet in the latest data published by France Invest. The association questioned its members for a study in which nearly 300 management companies participated. The firm Grant Thornton, which audits the data, is associated with the publication.
Thus, in the first half of the year, 1,559 companies and infrastructure projects (i.e. +25 % compared to the first half of 2021) were the subject of transactions for €18 billion invested by French private equity players. "Activity in the first half of 2022 is in line with the levels observed in 2021, a year of recovery after the slight slowdown observed in 2020 due to the health crisis", summarizes the association.
Strategic areas
Investments in industry (€3.1 billion, +55 % vs. H1 2021), healthcare (€2.7 billion, +23 %) and digital (€2.7 billion, +50 %) showed strong growth. "These sectors, which are strategic for the French economy, represent 62 % of the targeted companies and 66 % of the amounts invested over the six-month period"France Invest explains that three-quarters of the companies it supports are based in France.
Investments were mainly driven by investments of less than 5 million euros, with an average ticket slightly down at 8.7 million euros.
The same trend can be seen in the raising of capital : 21 billion between January and June, which will fuel investments in the coming years.
Fundraising is up in all segments (+18% in innovation capital, +46% in expansion capital and +82% in buyout capital).
Diversity of subscribers
The "Investors for Growth" association highlights the diversity of subscribers, with a strong increase in insurers (20 %) and the strong presence of mainly foreign pension funds (16 %) and funds of funds (15 %). International investors accounted for 52 % of fundraising (compared to an annual average of 41 % over the last 10 years).
"The increase in funds raised from a wide range of French and international players demonstrates the confidence of subscribers in French private equity and will give it the means to support start-ups, SMEs and SMIs over the long term"says Claire Chabrier, President of France Invest.
The association adds that the efforts undertaken to democratize the asset class are starting to pay off: "It should be noted that the private equity asset class is increasingly open to individuals and family offices, which invested EUR 1.9 billion in the first half of the year (+14 % compared to the first half of 2021) and accounted for 12 % of subscriptions". In contrast, individuals are absent from infrastructure fund subscriptions.
Concentrated market
During the first half of the year, these same infrastructure funds increased their investments, driven in particular by the renewable energy sector (amounts tripled compared to the first half of 2021 and +20 % in number). "All sectors combined, the amounts invested rose sharply (+68% in amounts and +12% in numbers), in line with the fundraising observed over the last two years"underlines France Invest.
On the other hand, the collection of these funds was down sharply (-41%) compared to the first half of 2021. "In a market that is highly concentrated around a small number of large players, the level of fundraising can vary greatly from one year to the next. This does not, for the time being, predict the level of annual fundraising."France Invest puts it into perspective.
75 % of capital was raised internationally for these infrastructure funds, slightly more than the annual average of the last 4 years.