Following the 2018 report on French Private Equity players, France Invest has just presented the performance statistics for the sector over the same period. An opportunity for Jean-Yves Lagache, Head of the Fund Investments team, to look at the previous year and observe the progress made over the past ten years.

Sustained growth on fundraising and high attractiveness for foreign investors

Capital raised reached €18.7 billion, up 13% compared to 2017, which was already a record year. This trend can be explained by the interest of a wide range of investors in the asset class. A sectoral but also geographical diversity, with capital raised internationally reaching 48% of commitments in 2018. This diversity provides a solid foundation on which Private Equity players can build. As in previous years, buyout drains most of the capital (53%) followed by growth capital (32%).

Increasing investment

Investment was also very dynamic in 2018. €14.8 billion have been deployed in 2,200 companies. The numbers have been steadily increasing since 2012. SME financing (investments between €5m and €100m) increased significantly in number of transactions (425 in 2018 vs. 352 in 2017) and is at the heart of the market (€8.2 billion invested).

More than one out of two deals involves companies that have opened their capital to an investment fund for the first time, a sign of increasing penetration of Private Equity in the economy.

Very positive net performances over a long period

the performance of French investment funds was generally good in 2018 with a 1-year net IRR of 8.8%. A similar performance over 10 years (8,8% net IRR). It should be noted, however, that there are large differences between the different segments. Over 10 years, the buyout has a net IRR of 11.6%, growth capital 5.7% and venture capital 3.5%.

In 2018, the French Private Equity market thus confirmed its success in terms of fundraising, investment dynamic and performance.

Jean-Yves Lagache

Managing Director – Fund investments

This note is a viewpoint of Essling Capital. It is intended to inform its readers in general and does not constitute investment advice or solicitation. Essling Capital declines all responsibility for any errors or omissions it may contain.

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