FRANCE Law and Practice Contributed by: Rima Maitrehenry, Fabrice Rymarz, Charles-Xavier Vincenti and Stein Mpassi Loufouma, Racine
1. Market Overview 1.1 State of the Market
In fact, according to France Invest (the major French professional association promoting the private equity industry), 2023 was a more dynamic year for private equity in France than the global trend would suggest (the third best year in terms of fundraising since 2009, with EUR23.8 billion raised). This stable level of activ - ity continued into H1 2024 (EUR9.5 billion raised) at a level comparable to H1 2023 (EUR8.6 bil - lion raised) (see France Invest & Grant Thorn - ton, Activité du capital-investissement français au 1er semestre 2024 and Activité du capital- investissement français en 2023 ). 2. Alternative Investment Funds 2.1 Fund Formation 2.1.1 Fund Structures Under French law, AIFs are classified into two main categories: • AIFs by nature, or per se AIFs ( FIA par nature ); and • AIFs by object, or Other AIFs ( Autres FIA ). AIFs are generally divided into: • AIFs dedicated to retail investors; and • AIFs dedicated to professional investors, with this latter form being more flexible in terms of setting up and terms and conditions to be complied with. Per se AIFs are specifically defined in the French monetary and financial code (FMFC), includ - ing rules governing their setting-up, terms and conditions. These rules are more specific than the ones set forth in Directive 2011/61/EU (the AIFMD). The Other AIFs include all other legal forms that operate as an AIF according to the AIFMD’s definition. The Other AIFs are not sub -
France is one of Europe’s largest and most developed investment funds markets, with a strong presence in both retail and alternative investment funds (AIFs). Governed by French regulator the Autorité des marchés financiers (AMF), the market benefits from stringent regulations aligned with EU Direc - tives, such as UCITS (the Undertakings for the Collective Investment in Transferable Securities Directive) and the AIFMD (the Alternative Invest - ment Fund Managers Directive). The market is dominated by institutional fund managers and global asset management firms, supported by a robust network of banks and independent advisers. Retail funds include equity, fixed income and balanced funds, while AIFs cover hedge funds, private equity, real estate and infrastructure funds. Despite global economic uncertainties, the French funds market has remained active, driv - en by the growing demand for sustainable and ESG-aligned investment products. For retail funds, there is a continued interest in UCITS-compliant funds, with inflows support - ed by household savings and tax-advantaged structures such as life insurance ( assurance vie ). AIFs have seen increased activity in private equity and real estate, benefiting from France’s attractiveness as a hub for innovation and green investments, especially with policies such as the Loi Industrie Verte encouraging ESG-focused strategies.
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