SJ. Galadima (Alphacap): “The democratization of direct investment is positive for the French economy”

Decision makers. What is the origin of your platform?

Suleiman-Jean Galadima. The team started with a fairly simple observation: from any stock exchange website, investors can access all information related to costs, past performance, volatility, and distribution of listed funds. On the contrary, when we look at non-listed assets—private equity, private debt, real estate, infrastructure—the myriad of investment vehicles and underlying vehicles make comparison, selection, or even identification overly complex. Based on this observation, we have decided to structure a platform covering the entire non-listed spectrum, targeting individual and professional investors. In order to achieve our goal of selecting only the highest quality funds (structuring, management, taxation, fees, risk/reward ratio), we conduct significant due diligence of funds and support the client in choosing the solution that best suits their profile. .

Why invest in private equity?

Today, many investors are interested in private equity and want to invest in it because this asset has historically outperformed traditional financial markets, which are highly volatile today. As a result, we are seeing a significant increase in private equity subscriptions. According to Invest Europe, in 2021, the value of new vehicles in the collection phase was 118 billion euros, a record figure. The previous record of 114 billion euros was set in 2019.

The aims of the Macron Act and then the Covenant Act, aimed at bringing the depositor closer to the company, contributed to its popularization…

We are seeing a “retail sale” of direct investment, in particular, after the adoption of the law on the Pact and the increase in the level of inflows. Today, people want to support the project more, participate in the development of companies, the growth of the country and understand how to use their savings. The private capital that helps startups break through, SMEs thrive, and unicorns grow is thus tempting to support them.

How does this promotion affect the sector?

The hypergrowth of private equity automatically makes us wonder whether, with such large capital inflows and such high valuations, portfolio managers will always be able to deliver on their promises to outperform the financial markets. Our conviction on this issue is quite radical. Indeed, when you double or triple your collection, it is very difficult to be so selective in your investment strategy. We believe that the democratization of this asset class is positive for the French economy. However, he requires even more rigor in choosing the best funds to diversify his subscriptions.

How can people make this choice?

This is not obvious because, unlike other asset classes, there are few ratings or publicly available data on private equity funds. We recommend that investors systematically question the reputation of management companies and their managers. This is to ensure that past vintages and their participation produce results in line with the original stated goal. If investors have enough assets to invest in professional funds, for which the minimum subscription is 100,000 euros, we suggest that they give preference to these instruments, which have more flexibility in their investment policy. Alphacap covers all segments of private equity and cooperates with management companies in France, Europe and North America.

How do you support your clients?

Our investors strive to invest calmly, quickly and sustainably. To do this, we determine, according to their profile, risk appetite or their assets, the ideal placement in unlisted shares. Some investors, for the most knowledgeable, can do it themselves using the platform’s features. All fund parameters, including fees, risks, maturity and returns, are displayed in a transparent and balanced way. The taxation of the funds is also analyzed, in particular for investors who wish to receive exemption from capital gains tax, as offered by some tax FCPRs or FPCIs. Entrepreneurs who are in a contribution transfer situation and are looking for solutions suitable for 150 0-B ter can also evaluate our selection on Alphacap.

Some real estate funds that invest in real estate dealer operations and development are also excluded from MFIs. There is also the question of the different investment formats used for investing in private equity:

– direct, also called the pure nominative case;
– through PEA-PME for eligible FCPR or ordinary securities accounts, also referred to as administered registered shares;
– French Life Insurance or PER (Retirement Savings Plan) for some FCPRs;
– through Luxembourg Life Insurance for FPCI or SLP.

Life insurance in Luxembourg allows investors to access private wealth within a streamlined tax and regulatory environment.

The last word?

Alphacap offers a quality selection of funds and supports its investors in the rapid implementation of unquoted, diversified and sustainable placements. Each investor can truly know the Sustainable Financial Disclosure Regulation (SFDR) classification to which the fund belongs and thus assess the environmental, social and environmental performance of their investment.

Juliet Woods Interview