Stocks: investments in non-listed stocks, instructions for use

The best investment in the last fifteen years? Look no further: this is not real estate (+6.3% p.a. between 2007 and 2021) nor the stock market (+5.1% p.a. for the CAC 40 index). And even less is the European life insurance fund, whose annual income is now about 1%. But it is indeed private equity, also called non-registered equity investment, that wins with an average return of +12.2% per annum, according to the latest valuation by the France Invest association published at the end of June.

The investment to remember is to support the long-term development of small, medium or medium-sized companies (SMEs and ETIs) by injecting new money into their capital. Or even accompany the leaders of these very companies in their debt buyback operations (the famous LBO) or their loans.

There are so many agreements that require years to come because the invested capital is most often only returned when a competitor or larger company comes up with an offer to buy the company or when it eventually goes public. And therefore, in the meantime, they have the peculiarity that they are very illiquid, the founding shareholders most often seek to fix their capital, and the shares of such companies require expertise to establish a price.

Therefore, it is not surprising that this type of investment has so far been the prerogative of professional investors such as Eurazeo, Ardian and Siparex funds. Or family offices, those cells created by millionaires and billionaires to thrive in family heritage.

But as you will discover in this full file, the unregistered are now open to the general public. This is how more and more insurance companies provide, in particular as part of their contracts sold on the Internet, the choice of FCPR (risk mutual funds) for subscription, which often require only 1000 euros for bets.

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Crowdfunding platforms are moving into a new niche: having funded fundraising for startups, they now allow employees who exercised stock options upon hiring to buy back unicorn shares, companies already valued at over one billion euros. Even state authorities are interfering in the matter: this is how Bpifrance launched the second year of issuing its public fund Bpifrance Entreprises, available from 3,000 euros, but whose collection package has already been exhausted in early July.

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While the Auvergne-Rhône-Alpes region offers in partnership with Apicil and Groupama FCPR dedicated to SMEs in the region. This fund, called Preférence Région Auvergne-Rhône-Alpes, is available for life insurance from €6,000. It would be all the more regrettable not to be interested in this sector, since the taxation associated with it is attractive: tax exemption is granted, under certain conditions, for investors who hold their SME securities, such as shares in FCPR funds, for at least five years. Fees, which have long been a deterrent to this type of product, have also begun to decline.

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Since the summer of 2021, subscription fees for non-listed shares under PEA and PEA-PME (Small and Medium Business Capital Accumulation Plan) have been effectively capped at 1.2% of the transaction amount, and custody fees can no longer exceed 0.4% from the transaction amount. the value of PEA has increased by €25 per non-listed security in the portfolio. Whereas before such commissions could reach several hundred euros at a time!

Of course, we should not forget that this is a risky investment, as 90% of startups eventually fail, including 10% in the first year. The sector is also in a state of complete overheating, with the average gain recorded in 2021 hitting a record 32%, according to France Invest, a sign that prices are now very high. Moreover, he will not remain indifferent to the economic situation (a slowdown in the economy will also affect the activity and, consequently, the valuation of non-listed companies), nor to the ongoing tightening of monetary policy (rising rates are unfavorable for LBO companies). ).

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“Due to environmental degradation, adjustments should be expected,” confirms France Invest. Already, fundraising in the young shoots of the financial sector (fintech) is slowing down, and some of them even had to lay off some of their employees. All the more reason to initially follow the recommendations of the regulators and limit the private listing to 10% of your assets.

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