NextStage AM, one of the pioneers of Development Capital in France, Spirica (Crédit Agricole Group) and Maison HEREZ unveil the results of their barometer on the expectations of French savers in terms of investment in private equity (PER , life insurance, capitalization contract, etc.). This asset class is attracting more and more people, including young savers.
The survey was carried out from May 24 to 31, 2023, by the OpinionWay institute among a representative sample of 1 savers with life insurance, a PEA or securities account, and/or savings from more than 065 euros. High net worth savers with capital of €10 represent 000% of this sample.
A regulatory context more favorable to the democratization of private equity
Private equity, also known as investment capital, has experienced a rise in popularity among individual savers in recent years following the relaxation of the regulatory framework brought about by the Pacte & PER law of 2019. of capital from institutional and private investors by French private equity players reached €25,5 billion in 2022 (excluding Infrastructure funds). Nearly 20% of this capital raised came from family offices and other individual investors, through direct subscriptions to fund units (FIP/FCPI/FCPR/FPCI/SLP, etc.) or via life insurance contracts in units of account (UA). This is a level nearly twice as high as the annual average observed over the 2016-2020 period. This trend should continue with the green industry bill which plans to direct a growing part of the 2.000 billion euros in outstanding life insurance and retirement savings towards unlisted investments. ELTIF 2.0, which should come into force at European level under the impetus of the European Commission on 10 January next, will include significant improvements, particularly in terms of marketing to retail investors, rules on the assets of the ELTIF as well as the passive.
In this context and as a pioneer in the democratization of private equity with the launch, in 2016, of the first private equity UC, NextStage Croissance, NextStage AM wished, with its partners Spirica and Maison HEREZ, to analyze and better understand the expectations of French savers, their level of knowledge vis-à-vis this asset class and identify the existing obstacles as well as the contribution of life insurance and PER in the allocation in the unlisted.
Uan asset class that appeals even more to young investors, but also to "already holders"
Thus, 25% of savers under the age of 35 surveyed said they had already invested in private equity, a rate much higher than the 15% observed for the entire panel. In addition, 100% of those under 35 say they are ready to repeat the experience, compared to 82% for the entire panel and 63% for those over 65.
For those who have never invested in private equity, 15% of these savers say they plan to do so in the future. Here too young people are the most determined with a response rate of 17% for those under 35 compared to 11% for those over 65.
This generational difference finds an explanation in the criteria for selecting placements. While those under 35 seek financial performance as a priority (28%), those over 65 favor security (44%) in their investments.
82% of existing holders are convinced of their choice and to continue their investment in private equity.
The search for financial performance and the desire to diversify savings take precedence over the quest for a tax advantage
For all of the people questioned, the decision to allocate part of their savings to private equity is based on the following triptych: the potential for financial performance (47%), the diversification of investments (47%) and finally tax optimization (45%).
Savers who have already invested in this asset class first highlight the need to diversify their outstanding portfolio (63%). This is also the argument most often put forward among those over 65, with high net worth savers favoring tax optimization and those under 35 favoring long-term financial performance, due to their investment horizon. .
Significant extra-financial motivations
Investing in the unlisted also reflects strong convictions among savers. The study thus reveals that among the main motivations of savers who choose this asset class are, in order of importance: support for the French economy (54%), development of the regional business fabric ( 48%).
The energy transition, through infrastructure or private equity funds favoring this dimension, garnered 43% and 45% of the votes respectively, while funds focused on innovation and digital transformation only garnered 26% of the votes.
Life insurance as the main support
Given its weight in French savings, life insurance remains the major receptacle for investment in private equity (41%). Retirement savings are nevertheless gaining ground significantly (16%, a percentage that rises to 31% among those under 35) as well as Luxembourg life insurance, in much smaller proportions (3%).
It should also be noted that life insurance platforms are gaining momentum. Thus 60% of holders have subscribed via these offers, 82% for those under 35 and 38% for those over 65.
Overall, a major lesson from this study is the role of advisors. These are essential in the choice of investment. 68% of private equity holders indicate that they have invested on the recommendations of their advisor (CGP, bank or insurance).
Still very significant potential subject to further lifting of certain obstacles
Despite the beginnings of the democratization of private equity, this asset class remains, for individuals, still relatively unknown. Only 21% of savers consider that they have a satisfactory level of knowledge, whereas for 78% of savers, lack of knowledge emerges as the main obstacle to subscription. Even those who have already invested are reporting this deficit. Admittedly, this proportion varies according to age with more than 10 points of difference between the under 35s and the over 65s. Advisors and distributors can and must therefore step up their educational efforts, no doubt in concert with the government.
Savers deplore a lack of transparency on the fees charged (30%) and the lack of liquidity (30%) of such an investment. In the category of existing subscribers, we also regret the low visibility and the lack of notoriety of the companies in the portfolio of invested funds.
The expectations of individual investors vis-à-vis private equity reflect the persistence of reluctance vis-à-vis this category of investment. They are ready to invest more subject in priority to:
- More transparency on the fees (44%) levied by distributors,
- The possibility of having exit windows before the funds mature (40%),
- Greater liquidity provided within the framework of a life insurance contract (37%),
- Simplification of subscription terms (32%)
Private equity holders also wish to regularly obtain more information on the holdings of the funds, in line with their investment motivations highlighted above (support for the French economy, development of the regional business fabric, energy transition, etc. .).
"NextStage AM has invested considerably with the government, as well as market players, for 20 years and in particular since 2016 to accelerate the democratization of private equity investment: Growth Law (2016), Pact Law (2019), Green Industry (2023). We are delighted to have been able to carry out this work, which also testifies to the ambitions of young savers to become active players in our economy. It needs it more than ever to succeed in its transformation,” says Grégoire Sentilhes, President and Founder of NextStage AM.
“The whole point of this study is to decipher the needs and motivations of savers, but also the obstacles that may still exist in terms of private equity. The results support us in our convictions. Private equity appeals by combining performance potential and diversification towards assets that are decorrelated from the financial markets – and therefore less volatile – while positioning itself as an important link in the financing of the energy transition. At the same time, encouraging financial education to help savers understand the interest of investing in this asset class and providing them with a clear and transparent communication service on the impacts of their investments seem to us to be decisive issues.” adds Daniel Collignon, CEO of Spirica.
“For almost a century in the United States, more than 50 years in Europe and 30 years in Asia, private equity has been considered a real asset class. But while the big players in private savings such as Goldman Sachs or JP Morgan recommend up to 20% of the savings of their large private equity clients, French private banks do not hold more than 1% of the savings of their unlisted customers! What luck for wealth management advisors and Multi Family Offices who are the pioneers in correcting this inconsistency.
The study looks back on the very good meeting of private equity with its new investors, savers in search of strong capital gains, real economy and measured risks, but also their expectations and their fears about liquidity, the difficulty of selection of the right fund or vehicle to accommodate this investment. Without a wealth management adviser or a Multifamily officer, it will be practically impossible for him to select his funds on his own, and even less to access them or optimize the hosting envelope. Maison HEREZ is one of the major French players in Wealth Management Consulting in France. For more than 25 years, Maison HEREZ has been supporting individuals in their investments and especially in the unlisted for 20 years”, adds Patrick Ganansia, President and Founder of Maison HEREZ.
About NextStage AM:
An independent management company based in Paris, approved by the AMF, NextStage AM, which has cultivated since the beginning in 2002, an "entrepreneur-investor" philosophy, is one of the pioneers and leaders of innovative and patient development capital in France. NextStage AM has developed, step by step, a multi-strategy Private Equity platform which represents in terms of assets at the end of December 2022, directly and indirectly, €7.5 billion in AUM. NextStage AM invests in a limited number of SMEs and ETIs (89 portfolio companies as of 31/03/2023), French and European, innovative and growing, to which it provides entrepreneurial expertise as an investor and strong operational support (integration environmental innovation, talents, international, external growth). NextStage AM provides long-term support to these SMEs and ETIs involved in smart health, environmental innovation and digital. It gives them the means to accelerate their development and their capacity for innovation to become the “Champions” of their markets, both in France and internationally, through organic and/or external growth.
About Spirica
Spirica specializes in the design and management of innovative and tailor-made life insurance solutions, distributed through its partners: wealth management advisor platforms, private banks, internet brokers. At the end of 2021, Spirica recorded 10,5 billion euros in assets under management.
https://www.spirica.fr
About Maison HEREZ
Maison HEREZ is today a major player in private management, wealth management and family office consulting and, as such, has been rewarded for several years by its peers. With nearly 5 billion euros in assets advised, Maison Herez is present in Paris, Lyon, on the Atlantic coast, Brussels and Tel Aviv. Its shareholders are made up of its founders, its employees and Florac, the family office of the Meyer family.
https://www.herez.fr
Press contacts:
NextStage AM: Jonathan Boudin – jbo@nextstage.com – 01 44 29 99 04
Spirica: Aurélie Dias – adias@spirica.fr / Françoise Bolokanik – francoise.bololanik@ca-assurances.fr – +33 (0)6 25 13 73 98 / service.presse@ca-assurances.fr
Maison Herez: Nathalie Belfort – n.belfort@herez.fr
Shan for NextStage: Laurence Tovi – laurence.tovi@shan.fr – 06 20 58 29 02 / Lola Gozlan – lola.gozlan@shan.fr – 06 24 76 83 40 / Anne-Laure Daulier – al.daulier@shan.fr – 06 28 59 50 38
