Afic: France needs urgent PR boost

Following a testing 2012, it came as no surprise to see macroeconomic and political issues featuring heavily at this year's Afic conference. But even when not discussing the topic directly, panellists and speakers couldn't avoid coming back to the same issue: France suffered from an acute image problem last year, and this fact is likely to keep influencing the industry throughout 2013.

Unfortunately, many of the factors affecting the country's attractiveness are out of the hands of local players, and perhaps sometimes unwarranted – yet GPs were warned not to underestimate the issue. "The importance of the projected image shouldn't be downplayed," said Ernst & Young partner Alexis Karklins-Marchay. "Take the Economic Freedom Index, where France ranks pretty poorly at the 62nd spot out of 177. This should be taken with a grain of salt since it is produced by a conservative think-tank and it ranks countries like Botswana or Jamaica ahead of France... But it is published in association with the Wall Street Journal and is followed by international investors."

France's image is of course particularly problematic when it comes to fundraising and was cited as one of the factors behind the noticable decline in amounts raised by local GPs in 2012.  Jérôme Halbout, a founding partner at 4D Global Energy Advisors explained: "US investors did ask us a lot of questions. Will we be impacted by the lack of growth? Will we be sufficiently incentivised given the recent fiscal developments?"

But several participants argued that GPs can overcome the challenges and focus on the best that France has to offer. Montefiore Investments' Eric Bismuth, whose firm's third fund has already exceeded its target and is now aiming for its €240m hard-cap, chose not to downplay the French connection: "Many people told us to understate the French angle to better navigate the tough fundraising environment. We decided to do exactly the opposite with our strategy: target French SMEs to help them grow into larger businesses with an international reach."

Afic chairman Louis Godron also reminded attendants that while France still faces considerable macroeconomic and fiscal challenges, the country also has several cards to play to attract international investors: "France has considerable potential, despite the crisis – this includes the size and depth of the economy, the productivity of workers, the considerable edge in innovation, and the record number of entrepreneurs compared to other European countries."

United front
Local private equity practitioners were therefore urged to pitch in and help the country regain its attractiveness, both by playing a greater role in the economy and by participating in increased PR efforts. "It appears to be somewhat fashionable for French people to denigrate the country while abroad – this is both criminal and suicidal," warned Emmanuel Macron, deputy secretary general to French president François Hollande, before trying to address the rift that emerged last year between the new government and the business world: "We need you. Please relay your suggestions to improve things and simplify the fiscal framework – we need concrete points. The president is very responsive on this issue."

Laurence Parisot, the influential president of industrial trade body Medef, joined in to call on private equity players to reach out and do a better job of promoting their impact: "The country's economy needs you. French people still don't understand finance: there is a need for explaining what your industry can bring to the table, and that effort should also be directed towards businesses and entrepreneurs," she advised.

Rounding up the call to action, Godron urged French private equity players not to let the country's gloomy mood impede their willingness to transact, and to take advantage of what he perceives as a promising shift in France's relationship to business: "Some key ideas are currently gaining ground, notably when it comes to the crucial role of competitiveness in the country's future, and the importance of entrepreneurs. There has been a noticable change since the autumn, and I would say that we have seen more progress in a few months than in the past few years."

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• France
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• AFIC