Unlisted, also known as “private equity”, continues to spread in unit-linked life insurance contracts. According to France Invest, in 2021 it dried up, through the life insurance channel, almost 4.8 billion euros, or almost triple compared to 2020. For the record, this investment consists in the purchase of shares in a fund consisting of shareholdings ( in the form of shares) in the capital of unlisted companies (start-ups, ETIs, SMEs). There are also variants: some funds specialize in infrastructure (bridges, wind farms) and others in private debt through the holding of bonds.
The boom in private equity in life insurance was made possible by the Pacte law of 2019. “This regulation eliminated the ceiling on the share of this asset in a life insurance contract which until then was limited to 10%”, recalls Dominique Collot, Suravenir Marketing Director.
Subsequently, this investment in the real economy was democratized thanks to two “public” fundraisers by BPI France as part of the Recovery plan. According to the Good Value for Money website, about fifteen mutual venture funds (FCPR, the legal structure in which private equity funds are housed) are currently referenced by a dozen insurance companies.
Support a company in its growth
“There are two categories: ‘closed’ funds, whose subscription window is limited in time with an outcome after ten years, and ‘perpetual’ funds, with a duration of ninety-nine or one hundred years, permanently open”, says Cyrille Chartier-Kastler, founder of this site. Why opt for private equity? “This investment has the advantage of being decorrelated from the financial markets. In addition, it is likely to provide double-digit performance “, says Guillaume Lucchini, founding president of Scala Patrimoine. France Invest indicates that, in the period 2007-2021, non-listed companies recorded an average return of 12.2% per year, against 6.3% for the real estate sector and 5.1% for the stock market. In addition, the shift of an unlisted share into a unit of account allows you to benefit from the privileged taxation of life insurance.
Initially, private equity made directly is not a liquid investment, because it is a firm commitment to hold unlisted shares of a company for a long period in order to support it in its growth. “However, in the context of life insurance, this liquidity is partly provided by the insurer”, says Valentin Pillet, head of private equity at Neuflize OBC. In the event of early resale of the shares, the person is repaid in cash and / or securities. However, this policy varies from company to company with sometimes additional costs.
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