Insurers commit to EUR 6bn of inves

11 December 2005

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French insurers will invest more than EUR 6bn in private equity funds by 2007, revealed director of the French insurance association Philippe Trainar, speaking at the CEFI Summit 2005. In a keynote speech, Trainar explained why French insurers are actively looking at private equity investments, despite the commonly held belief that private equity is not a natural asset class for insurance portfolios. He commented that the legal framework in France has been an incentive for investments in the private equity asset class. Â‘The minimum investment in non-listed companies has risen from 5% to 10%, whereas the minimum investment in listed equities has been decreased from 50% to 30%,Â’ he stated. However, owing to the illiquid nature of the asset class and the need for insurance portfolios to diversify, Trainar advised that the best way of insurers investing in private equity is via funds-of-funds. Â‘This will reduce volatility,Â’ he explained. Â‘It is a good strategy to invest in different industries and companies with different maturity cycles.Â’ He concluded that the optimum investment in private equity asset class for insurers is between 10-15% of their total investment.In early November, CEFI grouped together some 800 delegates for FranceÂ’s largest private equity conference. The event held at the CNIT, La DÃ©fense, boasted a selection of five parallel tracks for both days. Two tracks focusing on real estate and restructuring were new additions to the programme. The other tracks focused on buyouts, management teams, LPs and GP relations, and venture capitalism and technology. A wide range of panellists participated in the discussions, including AFIC CEO Gonzague de BligniÃ¨res of Barclays Private Equity, Lionel Scotto of Willinski Scotto, Dominique Nouvellet, CEO of Siparex, Nigel McConnell, managing partner of Electra, Jean-Marc Patouillaud of Partech International and Jonathan Nabarro of the banking practice of Allen & Overy LLP.