Burgundy to provide equity capital for the local French mid-market

30 November 2004

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Under the initiative of the Burgundy Regional Council, as of this year local French mid-market companies will benefit from a solid offer to reinforce their equity capital. Established last May with the help of EDF, a network of 27 'business angels' has started lending a helping hand to company founders and purchasers. Once the auditing it is complete, their average capital investment will range from Â€10,000 to Â€100,000. In the long-term, the network envisages creating a complementary fund to finance its members. Young businesses, especially those with an innovative character, will also be able to access a start-up fund, underwritten by the Institute of Economic Development in Burgundy (IDEB). IDEB is a private equity foundation was established in 1983 under the initiative of the regional council and numerous banks. The project envisages the creation of two funds, allocated from Â€12m - Â€15m. One will be destined to growth and buyouts and the other to help start-ups and innovation. Regional banks are also making a concerted effort to strengthen the revenues of businesses, whose turnovers haven't exceeded Â€50m or their staff 250, as of 1 January. The Caisse d'Epargnes in Bourgogne, Franche-ComptÃ© and RhÃ´ne-Alpes are launching their first FIP fund. It will be managed by RhÃ´nes-Alpes PME, a subsidiary of the Lyon-based private equity house Siparex. The FIP has a target of Â€5m, Â€2m of which will be reserved for the bank in Burgundy. Average investments are expected to range from Â€100,000 to Â€150,000.For mature businesses, another FIP has been put into place by the Banque Populaires in Bourgogne, Franche-ComptÃ© and Auvergne. Named BP pro Centre Est and with a target of Â€3m, it is orientated towards mature mid-market companies with a good growth potential. Around ten investments are planned over the three regions.