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PRESS RELEASE Paris, Mach 29th 2016 FRENCH PRIVATE EQUITY ACTIVITY IN 2015 MORE THAN 10 BILLION EUROS INVESTED, THE HIGHEST IN 8 YEARS 10 BILLION EUROS IN FUNDRAISING INCREASE IN VENTURE CAPITAL INVESTMENT The French Association of Investors for Growth (AFIC, French association for private equity and venture capital) and Grant Thornton are happy to present their study on the activity of French private equity in 2015. Michel Chabanel, the President of the AFIC noted, “2015 was a good year. The 10 billion euro threshold of investments and fundraising is all the more satisfying given the increase in venture capital investments. Nevertheless, we are still behind the 20 billion euros invested in unlisted businesses in the UK. With an aim at fostering durable economic growth in France, our goal moving forward is to increase our resources in order to continue to support young, talented French entrepreneurs and transform small French companies into middle-market European or global businesses. The upcoming French presidential elections are the right time to direct the great wealth of French savings towards investments in the real-world economy, which will create tomorrow’s jobs.” MORE THAN 10 BILLION EUROS INVESTED, THE HIGHEST IN 8 YEARS In 2015, the French private equity industry invested 10.7 billion euros in transformative businesses. This represents a 23% increase compared with 2014’s investments and an 8-year highpoint. Once again, more than 1,600 businesses—1,645 to be precise—received the support of members of the AFIC. The majority of these companies were small businesses (78%). The others were middle-market companies (21%) and large businesses (1%). 85% were French. The venture capital indicators are very positive. Both the number of businesses supported (499) and the amounts invested (758 million euros) are at record highs. Moreover, there has been a 67% increase in the intended allocation of funds raised with 1.4 billion euros intended for venture capital in 2015 vs 0.8 billion euros in 2014. It will be important to 1 move forward in this direction in order to meet the needs of the French Tech and contribute to the rapid growth of French businesses in all sectors of the economy. Growth capital supported 866 businesses (53% of the total 1,645 businesses) with 3.9 billion euros of investment, an increase in investment of 48% from 2014. The 261 businesses under LBO benefited from 6.1 billion euros of investment, an increase of investment of 12% since 2014 for a total of 57% of total private equity funds invested. The average amount invested by business was 6.5 million euros. The average was 1.5 million for venture capital, 4.4 million euros for growth capital, and 23.4 million for LBOs. In total, more than 50% of businesses received less than 1 million euros, and 87% of investments were greater than 5 million euros. Record sums were invested in traditional sectors: 2.6 billion euros in industry (double the 2014 level), 2.6 billion euros in services and transportation (up 50% since 2014), and 1.8 billion in the forwardlooking digital sector (more than 4 times the amount in 2014). 10 BILLION EUROS IN FUNDRAISING In 2015, France, viewed from a private equity standpoint, remained attractive with 9.7 billion euros in fundraising to be put to use in the real-world economy by the 77 French private equity firms that collected this sum. This level (down 4% since 2014) approaches the pre-crisis level (an annual average of 10.5 billion between 2005 and 2008). As in the two previous years, 2015’s fundraising did not include any operation exceeding the 1 billion euro mark. This signifies a better fundraising distribution for all private equity professionals. As for the kinds of subscribers, we noted a 24% decrease in fundraising for funds of funds since 2014 with 2.1 billion euros collected (21% of total fundraising), a fundraising increase for individuals and family offices (1.6 billion euros collected or 16% of total fundraising). The portion of insurance companies is now approaching its pre-crisis levels (1.6 billion euros in 2015 vs a 1.9 billion 2006-2008 annual average). This level is still insufficient given the available reserves of savings. Industrial actors, although they represented only 4% of the total annual fundraising, more than tripled their investments (364 million euros vs 111 million euros in 2014). French investors were behind 71% of the fundraising, and foreign investors confided 3 billion euros to members of the AFIC. This is a positive sign of France’s attractiveness and economic perspectives for the next 3 to 5 years, as well as a sign of confidence in French private equity to deliver lasting performance. The percentage of foreign investors is proportionally greater for fundraising operations larger than 200 million euros, with 35% of operations over this amount taking place abroad vs 15% for operations under the 200 million euro mark. A RECORD HIGH FOR DIVESTMENTS 2 2015 was a record year for divested companies (1,209). Moreover, the cost was at an historical low, down 30% since 2014, but still higher than the 4.9 billion long-term annual average for 2006-2014. Businesses were sold to industrial actors (first-place in terms of the number of operations with 249 businesses sold for 1.3 billion euros), private equity firms (first-place by the total price of sales with 1.9 billion euros for 189 operations). This second figure confirms the importance of long term investors. We also noted a large increase in businesses being sold to management with 38% more operations (233 vs 169 in 2014) for 0.6 billion euros vs 0.4 billion euros in 2014 (a 52% increase). Thierry Dartus, a Grant Thornton partner and head of the Transaction Advisory Services department, remarked, “with an exceptional level of investment that surpasses pre-crisis levels and an historic number of divestments, 2015 confirmed the high level of activity observed since 2013 on all segments of the market. The French private equity market, with an abundance of funds, has confirmed its commitment to financing innovation, growth, and the transmission of businesses, as we can see from the number of operations and the increase in the average amount invested in each business on all the segments of the market. The activity of the next months will rely on this solid equity foundation, which will allow businesses to continue to create value.” All statics concerning the activity of the French private equity market in 2015 are available at www.afic.asso.fr/statistiques. ABOUT THE AFIC The AFIC brings together almost all of the private equity funds active in France and has about 280 active fund members. Through its strict deontological framework and its mission to develop best practices, the AFIC is one of two associations recognized by the Autorité des Marchés Financiers (French Financial Market Authority) where private equity firms are legally required to be members in order to practice. It is the only professional association specialized in private equity. The AFIC’s priorities are to promote and actively develop French private equity by bringing the profession together and establishing best practices for responsible professional investors. FOR MORE INFORMATION, PLEASE CONSULT THE AFIC’s WEBSITE. ABOUT GRANT THORNTON FRANCE Grant Thornton, leading audit and advisory group, has 1,600 employees in France, including 110 partners in 22 offices, with positioning in five business lines: audit, appraisal consulting, financial consulting, operational & outsourcing consulting, and legal and tax consulting. Grant Thornton supports dynamic companies (listed companies, public and private companies) to enable them to free up their growth potential with the help of involved and dedicated partners supported by teams with very high value-added expertise. The members of Grant Thornton International make up one of the major audit and advisory organizations in the world. Every member of the network has full financial, legal and management independence. FOR MORE INFORMATION, PLEASE CONSULT the www.grant-thornton.fr. PRESS CONTACTS AFIC: Antoinette Darpy |+ 33 6 72 95 07 92 - [email protected] Grant Thornton: Agnès de Ribet |+ 33 1 56 21 06 34 - [email protected] 3