small and medium-sized enterprises (SMES) and enterprises of intermediary size (ETI) the French have the potential to gain much more important than the major international groups listed on the stock Exchange.
The fact of their modest size, these companies, when they are well led, may be entitled to a higher growth path and promise of their shareholder returns attractive, of the order of 8 to 25 % on average, according to the professionals.
In addition, the investor generally enjoy a taxation lenient, or even beneficial : reduction of income tax or solidarity tax on wealth (ISF), lack of taxation on the capital gains thanks to the eligibility for the savings plan in shares (PEA) or PEA-SME…
beyond these financial considerations, non-rated, also known as capital investment or private equity, can be to the investor a way to support our industrial fabric. For Tanguy de la Fouchardière, president of France Angels, an association that brings together business angels, it is a way “to recycle a portion of its assets in the real economy.” Provided, that is, bet only what you can afford to lose,” says this seasoned investor !
A risk of loss of capital real property
Because the risk is inherent in this type of investment. “All the start-ups or SMES do not succeed, so for the investor, the risk of capital loss is very real,” warns Pierre-Michel Deléglise, director general of Financial Funds, Private consulting firm dedicated to the investment in the non-side.
The selection of records is therefore crucial. All the more that this market is not as liquid as the stock Exchange. It is thus necessary to rely on the good intermediaries. As for listed equities, a diversified portfolio helps to limit the losses.
This work should cover both the selected companies on their sectors of activity and their areas of markets. Finally, this type of investment must remain in the minority. It is strongly recommended not to place in the private equity industry 5% of available capital, and even up to 10 % for the wealthy.
These instructions caution well in mind, anyone can instill a dose of non-side in its heritage. Several vehicles provide access to SMES, according to your budget. Small portfolios may be interested in crowdfunding, when the wealthy will be able to dream of business angels, investing directly in companies. Find your way !
The solution of crowdfunding for modest budgets
Literally “funding by the crowd” or crowd-funding, crowdfunding represents a gateway into the non-side for the budgets of the smaller. It is usually centered on young companies.
The principle ? Investors come together via an Internet platform (for example, Anaxago, SmartAngels, Wiseed…) to finance a project, with the hope of collecting more capital gains. The gains, however, are far from being systematic.
Wiseed says so in his guide for the investors that, statistically, about ten financed companies, three will be liquidated and five will multiply the initial wager by one to three, and two will be in a multiple of ten or more. A vision that is still rather optimistic, and that also depends on the selectivity of the platform in the folders presented to users.
beyond the financial motivation, “the investor must have the desire to give meaning to its investment, by ensuring that its money is used to something”, explains Stéphanie Savel, vice-president of the professional association Funding Participatory France and general director of Wiseed.
Through the sites, the investor accesses a large number of information about the company that it intends to finance (type of project, location, business plan, etc.). It can therefore be supported in full knowledge of the cause that of his or her choice.
If the collection reaches the objectives set by the company, the project is materialized, and the investors become shareholders, either directly or – in most cases – via a holding company that includes all of the investor of the platform, and serves as the point of contact for the contractor.
most of the records submitted to the crowd-funding benefit from the taxation specific to direct investments in SMES. This represents a reduction of income tax of 18 % of the amount invested, up to a maximum of € 50,000 for a single person and € 100,000 for a couple.
Under certain conditions, the records are eligible for the reduction of ISF, for 50 % of the stake, in the limit of 45 000 euros. Another tax strategy, not to be combined with the previous one : place his shares in a PEA, or a PEA-SMES to benefit from the exemption of tax on capital gains at the end of five years, the social security contributions of 15.5 % remaining due.
cool Side, crowdfunding remains affordable. The registration is completely free. When a holding company is put in place after the lifting of the fund, the management fees are levied on the total amount collected, up to 5 % (this varies from one actor to another).
Finally, in case of success, a commission can be used on the net capital gain realised by investors (20 % at Wiseed). This is not systematic, SmartAngels for example, do not use.
The weak point of crowdfunding remains liquidity. You have no guarantee of being able to sell your securities at the time desired. The platforms tend to to look for an exit door at the end of a few years (a buyer, ipo…), but they have no obligation of result !
The mutual funds for innovation (FCPI) and investment funds proximity (FIP) are the most visible part of the iceberg of private equity. These products, distributed by banking networks or advisors wealth management, have managed to attract the graces of investors because of their tax benefits, even if they were planed down over the years.
Created in 1997, the FCIC will fund young innovative companies. They must also meet the conditions set by law, and to invest at least 70 % of their assets in this type of business. Appeared in 2003, the FIP does not present a constraint segment, but must bet at least 80 % in French companies non-listed, belonging to the four neighbouring regions. At least 20 % of these companies must have fewer than eight years.
These two media offer a convenience of great interest to the neophyte : they are entirely built and managed by one manager specialist, who also handles the resale of a number of holdings when the product arrives to its term.
On the other hand, you’ll have almost no chance of recovering your bet before. “It is necessary to read the terms and conditions of the contract to know for what duration the client agrees specifically” recommends Anthony Valdes, president of the management company Alto Invest. Use generally over ten years.
The hope of gain is advanced by managers is variable. Alto Invest notes on three of its funds returned a performance of between 6% and 7% per year, while stressing that seven funds have been reimbursed in total and that the risk of loss of capital exists.
But the investors are primarily interested in the carrot of tax they receive in the first year following the subscription.The investor can claim a tax reduction on the income corresponding to 18% of its investment, within the limit of eur 12 000 for a single person and € 24,000 for a couple. Attention, these amounts are included in the calculation of the overall ceiling of tax loopholes, set at 10 000 euros !
Finally, the persons liable for payment of the ISF can – with some products – to reduce their contribution of an amount equivalent to 50 % of their bet, to the amount of 18 000 euros. With regard to the possible gain, it is exempt after five years, excluding social security contributions of 15.5 %.
Las, the gain is often whittled away by the costs of these products. Allow up to 5 % entry fee, which must be added the costs of management, of the order of 3.5% per year. On life support, it sales ! The Court of auditors has estimated that over a period of eight to ten years, the actual costs of the FIP and FCPI funds were accumulated by 36 to 45 % of the amount paid by the taxpayer.
Via life insurance
Designed to invest in non-listed companies, the mutual funds at risk (FCPR) are rather intended for a restricted public, professionals or investors warned. Only a few products aimed at a customer base a little bit wider. But, since the law Macron August 2015, these funds develop through life insurance.
companies have long been reluctant to offer this type of support in their contracts. In fact, in the case of redemption or death of the holder, the establishment was to ensure the liquidity of the investment in the non-side.
Now, the act authorizes the insurer to send the titles directly to the subscriber or to his heir in place of cash, leaving the latter free to keep them or manage to resell.
Since then, three companies have launched a bid : Axa with the fund Next Growth, BNP Paribas with Idinvest Strategic Opportunities and CNP Assurances with CNP Pep. They joined Spirica (a subsidiary of Credit Agricole) who proposed that for two years already access to private equity FUND via a life insurance policy.
This actor is the exception, as he has referenced these materials in contracts are very accessible, which Netlife, open for subscription as from 1 000€. For the rest, it is on all of the envelopes to top of the range, with an entry ticket of between a few tens and a few hundreds of thousands of euros, that include this offer.
These units work a little differently than others. First, their rate of annual fee average is high : approximately 4 to 5 % per annum, to which must be added the cost of the contract. In addition, these units may have a blocking period of four to five years.
beyond that, even if exit fees can be provided, the insurers guarantee the availability of funds to the client. It is one of the advantages especially appreciated this investment solution. Beware, however : some agree, in case of redemption to make you cash when others will let you cope with your titles.
Aside taxation, what are the rules of life insurance apply, a tax lean after eight years. On the other hand, placed in a securities account, the FUND gives the right to an exemption of the capital gain after five years, excluding social security contributions. “A private equity FUND acquired in a life insurance contract is not more interesting for tax purposes only when it is subscribed to live,” explains Daniel Collignon, director-general of Spirica. It is liquidity, when elthe is guaranteed by the insurer, which is the major argument.”
Join the club of business angels
The private equityne can be defined without its “angels”, also known as business angels. This investment strategy is aimed at a high-end clientele : if the minimum amount is around 30 000 euros to projects of more modest means, it can climb up to more than 100 000 euros.
according to their contribution, these individuals acting individually or gather several to finance young companies with high potential, with the hope of a high yield, of the order of 15% to 20%, according to the professionals. They take advantage of the tax benefits related to investing in direct in SMES (see above, chapter on crowdfunding). Has the resale of their securities, the capital gain is taxed, but the exemption can limit the note.
To join this club, it is therefore necessary to have a soul of an entrepreneur, have at least a few tens of thousands of euros to place, but also a little bit of time to devote to it.
The business angels are often former entrepreneurs who want to reinvest the fruit of their labour in the real economy. This allows them to diversify their assets or to benefit from the tax system of re-employment after the sale of their business : the capital gains realized on the disposal of a society are the object of a deferral of taxation in case of reinvestment in another company.
The special feature of these investors is to take fully part in the development of the start-up selected. First, by directly investing in the capital of companies, without any intermediary. Then by advising its leaders, in order to accompany the growth of the company. Also, prior to any implementation, “the business angel reviews the projects and the business plans and corrects them”, explains Tanguy de La Fouchardière.
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But the intermediaries also can you chew the work. This is the case of the consulting company Financial Private Fund that offers this type of policy to a client advised by taking charge of the selection of applications for funding. Depending on the implementation, this service is charged between 2% and 5% of the amount invested. Here again, investors are often former entrepreneurs.