AFIC announces further news of FranceÂ's private equity activity in 2000

01 June 2001

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The French venture capital association, AFIC, in collaboration with PricewaterhouseCoopers and Arthur Andersen, has produced further research into the performance of French-based private equity players in 2000. AFIC, which has 160 members and 60 associate members, reports that FFr 35bn was invested and FFr 40bn was raised by French-based players in 2000, almost doubling the figures for 1999. The amount of capital raised is just ahead of the European average and has risen ten-fold over the past four years. Meanwhile, the amount of capital invested has multiplied by four. The gross average IRR generated in France in 2000 was 25.15%, reflecting a gross average of 39.27% for early-stage deals, 24.12% for expansion deals and 26.33% for buyouts. Patrick Giovanni, the chairman of AFIC, particularly highlights the fact that the level of investment in 2000, which financed 2,994 transactions, was greater than the amount of capital raised on the Second and Nouveau MarchÃ© (FFr 21bn).

In terms of investment stage, buyouts remained relatively stable, with 38% of investment going to this area, while development capital saw a slight fall, to 36%, and early-stage deals grew, seeing 21% of all investment. Overall, FFr 461m was invested in seed capital deals. Despite the fall-out from the loss of confidence in internet stocks, investment in the technology sector, which stood at FFr 17.8bn, represented 51% of the total, while investments in Biotechnology doubled and the consumer goods sector received FFr 5.9bn of investment, almost three times the figure for the previous year. As in the rest of Europe, however, the amount generated by exits fell to FFr 6.5bn.

Looking ahead, AFIC sees the potential for growth within the French market as strong, despite upheaval in the stock markets and the first signs of an economic slow-down. Members are reporting that companies seeking funding are better-preparing their business cases, while institutions and individuals are showing greater enthusiasm for FCPRs, FCPIs and SCRs. In addition, Afic and AFG-Asffi (lÂ’Association franÃ§aise de gestion financiÃ¨re) have jointly announced a new set of guidelines for fund managers, especially of FCPRs. The guidelines, which have been approved by the COB (Commission des OpÃ©rations de Bourse), have been established mainly to protect investors and to promote transparency in the French market.