EY

Performance of French private equity at end 2014

The French private equity and venture association, AFIC (Association Française des Investisseurs pour la Croissance) and EY have published their annual report on the net performance of French private equity at end 2014.

“French private equity returns, which outperform all other asset classes, reflect the quality of this type of financing and support provided to companies. In addition, this outperformance went hand-in-hand with low volatility and, therefore, lower risk. Work conducted by some 275 private equity teams in France helped bring to life growth projects ranging from start-ups to mid-tier companies. Another source of pride is that, by channeling savings into the real and local economy, private equity makes a major contribution to employment, creating more than 250,000 jobs over the four-year period between 2010-2013, whereas the commercial sector as a whole lost 60,000 over the same period,” stated Michel Chabanel, Chairman of AFIC.

STRONG PERFORMANCE REMAINS STABLE OVER THE LONG TERM
The performance of French private equity since inception, measured at end 2014, came in at on average 10.1% IRR net of charges per year, up from 9.5% at end 2013 on a like-for-like basis.
Over a 10-year horizon the average IRR increases to 11.3% net (compared with 10.9% like-for-like at end 2013).
These figures reflect the robust long-term profitability of this asset class and the stable performance.

OUTPERFORMING THE LISTED EQUITY MARKETS
Once again French private equity outperforms other asset classes over the long term. Over a 10-year horizon, the average annual return of 11.3% is twice as high as for listed equity markets (4.8% for the CAC 40i, 5.8% for the CAC All-Tradable – formerly SBF 250, based on the PME method). The results are the same compared with the bond and real estate markets which recorded growth of respectively 5.4% and 6.4%.

PERFORMANCE BY SECTOR
Over a ten-year period, the average annual return of venture capital has grown significantly, from 0.8% at end 2013 to 2.1% at end 2014, and reaching 4.4% over a 3-year horizon.
Over 10 years, the performance of buy out capital and growth capital is up from the previous year, at 15.6% and 6.5% respectively compared with 15.2% and 6% on a like-for-like basis at end 2013.
Hervé Jauffret, Partner at EY, adds: “2014 confirmed the robust performance observed at end 2013 with French private equity 10-year performance fixed above 10% over the past few years”. Philippe Blanadet, Partner at EY, states: “While performance varies across private equity sectors, venture capital saw impressive growth in 2014 with 3-year performance at 4.4%”..

N.B. – The text does not bind the staff of LMFInternational. Only the companies, organizations and associations which sign the press release and which are clearly indicated in the title of the text, are responsible for its information and contents.