Pitchbook, a leading provider of research and data on private markets, has recently launched their new research series called Country Snapshots. These snapshots provide an overview of macroeconomic and microeconomic trends in various regions, including both private and public markets. In their most recent report on France for Q2 2023, Pitchbook has highlighted some interesting findings.
According to Pitchbook, the private equity (PE) deal value in France has surpassed the levels seen in Q2 2022 and has continued to increase quarter-on-quarter (QoQ) in Q2 2023. One notable deal during this period was the buyout of database management startup DATA4.
The exit value in the first half of 2023 was also stronger on a quarterly basis compared to the same period in 2022. Furthermore, all of the top five exits in the region were buyouts, indicating a higher prevalence of this strategy in France compared to its peers, such as the UK.
In terms of fundraising, Pitchbook’s European PE Breakdown Report reveals that H1 2023 has been particularly strong. The capital raised in the first half of the year has already exceeded the levels seen in 2022. Interestingly, the European Investment Fund and Bpifrance, which are the same two limited partners (LPs) that have made the most venture capital (VC) commitments in France over the past three years, have also made the most commitments to PE funds in the country. Ardian, a prominent player in the PE market, ranked third in terms of the number of commitments.
On the GP side, Bpifrance has made the highest number of PE investments in France, with a total of 360 investments. This indicates their strong presence and influence in the region. Overall, Pitchbook expects fundraising in Europe to remain robust throughout 2023, building on the strong momentum seen in H1.
The French government has also played a role in shaping the investment landscape. In Q2 2023, they announced tax credits to encourage investments in renewable and low-carbon technologies. This move is expected to attract substantial private investments. Additionally, the government announced a new initiative focused on mining critical metals, which will include both private and public capital. This project, planned for 2024, is likely to be the first of many initiatives aimed at supporting the supply chain security of critical materials.
In line with the broader European market, macroeconomics continues to be a key focus in French financial markets. Market participants are eagerly awaiting an easing of interest rates and inflation, which are seen as crucial factors influencing investment decisions.
While VC dealmaking activity in France has declined from the levels seen in Q2 2022, with deal value also decreasing QoQ in Q2 2023, the European Investment Fund has remained a prominent player in the sector. They have made the highest count of LP commitments to VC funds in France over the past three years. On the GP side, Bpifrance, a government-owned entity, has made the highest number of VC investments in the region, significantly surpassing other top allocators.
These insights from Pitchbook’s Country Snapshots series provide a comprehensive view of the private markets in France, shedding light on key trends and developments. With the French government’s focus on promoting sustainable investments and the strong fundraising activity in the region, it is clear that France continues to be an attractive destination for investors.
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