Assessment of bpifrance Entreprises funds

Trends in individual investment in Bpifrance funds

• For each of the funds made available directly on the Bpifrance platform since 2020, between 1,500 and 2,000 individual investors have invested. Only 16 per cent of investors have invested in at least two Bpifrance funds, meaning that more than 5,000 individual investors have invested in a Bpifrance fund via the platform, to which must be added around 4,000 investors who engaged regularly with the platform without ultimately investing.
• The average amounts invested in the funds range from 7,500 to 15,000 euros, and have fallen from fund to fund as the minimum investment thresholds imposed by Bpifrance have themselves decreased.
• The fall in the average amounts invested also corresponds to investor profiles with lower levels of income and wealth. The proportion of subscribers with a net annual income of less than 100,000 euros has thus risen from around 65 per cent to nearly 80 per cent. There has therefore clearly been a democratisation of the funds over time.

The representativeness of Bpifrance investors within the French saver population

• The investor base is significantly better off financially, but also younger, than the national average, and comprises nearly 90 per cent senior executives.
• The income level of subscribers, on the other hand, is very similar to that of the French population holding shares. However, they remain both wealthier in terms of assets, younger and more likely to be senior executives than those who hold shares.
• Subscribers to the Bpifrance platform are, even at the same income level, just as likely to hold life insurance policies as the rest of the French population.
• Conversely, for the same income or age, the rate of ownership of unlisted shares is much higher amongst those who use the Bpifrance platform, which could indicate that the group interested in Bpifrance funds is a segment of the population that is particularly well-informed or drawn to this type of investment.
• In terms of income and age, Bpifrance subscribers are significantly younger and slightly wealthier than the many French people who hold enough shares to receive dividends.
• Subscribers are also significantly younger but have lower incomes than French people who invest in tax-advantaged funds focused on unlisted companies, such as FCPI, FCPR and FIP, or via the ‘apport-cession’ scheme.
• The group of savers to which Bpifrance subscribers are ultimately most similar, in terms of both age and income, is that of French people who invest in risky, innovative and directly held investments such as digital assets like cryptocurrencies and
  crowdlending. This group is expected to comprise several tens of thousands of tax households by 2023.

Individual determinants of the decision to invest in a private equity fund

• Several statistical methods are used (regression, LASSO, random forest) to predict the decision to subscribe to the Bpifrance fund, provided that the individual has registered on the platform and is therefore aware of its existence.
• What emerges, first and foremost, is that having greater financial assets is the strongest predictor of the decision to subscribe once an individual has accessed the platform.
• Furthermore, investment in Bpifrance funds is less likely when the investor – despite being sufficiently informed to interact with the platform – states that they are seeking liquidity or have an investment horizon of less than five years.
• However, amongst a representative sample asked specific questions about unlisted investments, it is knowledge of the characteristics of private equity and how to access it that determines the willingness to invest in unlisted investments, rather than socio-demographic variables such as income or age.
• Bpifrance’s success must therefore also be assessed in future in terms of its ability to inform savers about the characteristics of unlisted investments (particularly their potential returns) and the ways to access them.