France's financial sector surges ahead

Vidur Sachdeva
29 February 2016

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Private equity investment in the French financial sector has consistently gained momentum over the last four years, according to unquote" data. Vidur Sachdeva reports

According to unquote" proprietary statistics, private equity investment in France's financial sector has surged to an all-time high after dealflow in the sector increased by 75% from eight transactions in 2014 to 14 in 2015, comfortably surpassing the previous peak of 10 deals noted in 2011.

Total value increased as well, up 126% from €367m to €830m. Although aggregate value remained considerably below the previous high of €2.4bn recorded in 2011, it is worth noting that 79% of that €2.4bn can be directly attributed to just two large deals completed in 2011.

Insurance policy
A closer look at the data reveals that private equity investors are currently targeting one sub-sector in particular: insurance brokers. Consistently high levels of turnover and profitability set against a background of relatively low levels of regulation are among the factors put forward to explain private equity's remarkable appetite for insurance brokers in France. Highlights included Ardian's buyout of insurance broking services provider Siaci Saint Honoré in February 2015, understood to have been valued at €520m; and in September last year, Blackfin Capital Partners' buyout of insurance broker Groupe Santiane.

Over the last two years, the insurance brokerage sub-sector was home to nine deals worth €831m. This accounts for 41% of the total deal volume and 69% of total deal value in France's financial sector during the 24 months to the end of December 2015.

Other sub-sectors that witnessed an increase in dealflow in 2015 were consumer finance and speciality finance. In combination, the three aforementioned sectors accounted for 13 of the 14 deals reported in France's financial sector in 2015; the remaining deal was recorded in the mortgage finance sub-sector.

In terms of vendor types, family and private vendors were the source of five transactions while private equity firms themselves initiated three secondary buyouts – all of which took place in the insurance brokerage sub-sector.